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EXHIBIT 10.3
[EXECUTION COPY]
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AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of August 28, 1997
among
MEADOWCRAFT, INC.
(the Borrower)
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(the Lenders)
and
NATIONSBANK, N.A.
(the Agent)
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TABLE OF CONTENTS(1)
PAGE
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ARTICLE 1 DEFINITIONS.............................................................................................. 1
SECTION 1.1. Definitions........................................................................................ 1
SECTION 1.2. General............................................................................................33
ARTICLE 2 REVOLVING CREDIT FACILITY................................................................................34
SECTION 2.1. Revolving Credit...................................................................................34
SECTION 2.2. Manner of Borrowing Revolving Credit Loans.........................................................34
SECTION 2.3. Repayment of Revolving Credit Loans................................................................36
SECTION 2.4. Revolving Credit Note..............................................................................36
ARTICLE 3 LETTER OF CREDIT FACILITY; IRB L/CS......................................................................37
SECTION 3.1. Agreement to Issue.................................................................................37
SECTION 3.2. Amounts............................................................................................37
SECTION 3.3. Conditions.........................................................................................37
SECTION 3.4. Issuance of Letters of Credit......................................................................38
SECTION 3.5. Duties of NationsBank..............................................................................38
SECTION 3.6. Payment of Reimbursement Obligations...............................................................39
SECTION 3.7. Participations.....................................................................................39
SECTION 3.8. Indemnification, Exoneration.......................................................................41
SECTION 3.9. Supporting Letter of Credit; Cash Collateral.......................................................42
SECTION 3.10. IRB Letters of Credit..............................................................................43
ARTICLE 4 TERM LOAN FACILITY.......................................................................................44
SECTION 4.1. Term Loan..........................................................................................44
SECTION 4.2. Manner of Borrowing Term Loans; Interim Construction Loans.........................................44
SECTION 4.3. Repayment of Term Loans............................................................................45
SECTION 4.4. Term Notes.........................................................................................45
SECTION 4.6. Voluntary Prepayment of Term Loans.................................................................46
ARTICLE 5 GENERAL LOAN PROVISIONS..................................................................................47
SECTION 5.1. Interest...........................................................................................47
SECTION 5.2. Certain Fees.......................................................................................51
SECTION 5.3. Manner of Payment..................................................................................52
SECTION 5.4. Loan Accounts; Statements of Account...............................................................53
SECTION 5.5. Termination of Agreement...........................................................................53
SECTION 5.6. Making of Loans....................................................................................54
SECTION 5.7. Settlement Among Lenders...........................................................................55
SECTION 5.8. Mandatory Prepayments..............................................................................59
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(1) This Table of Contents is included for reference purposes only and
does not constitute part of the Loan and Security Agreement
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SECTION 5.9. Early Termination Fee..............................................................................60
SECTION 5.10. Aggregate Amount of Loans and Letter of Credit Obligations.........................................60
SECTION 5.11. Funds Transfer Services............................................................................60
ARTICLE 6 CONDITIONS PRECEDENT.....................................................................................62
SECTION 6.1. Conditions Precedent to Effectiveness..............................................................62
SECTION 6.2. All Loans; Letters of Credit.......................................................................65
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF BORROWER...............................................................66
SECTION 7.1. Representations and Warranties.....................................................................66
SECTION 7.2. Survival of Representations and Warranties, Etc....................................................77
ARTICLE 8 SECURITY INTEREST........................................................................................78
SECTION 8.1. Security Interest..................................................................................78
SECTION 8.2. Continued Priority of Security Interest............................................................79
ARTICLE 9 COLLATERAL COVENANTS.....................................................................................81
SECTION 9.1. Collection of Receivables..........................................................................81
SECTION 9.2. Verification and Notification......................................................................82
SECTION 9.3. Disputes, Returns and Adjustments..................................................................82
SECTION 9.4. Invoices...........................................................................................83
SECTION 9.5. Delivery of Instruments............................................................................83
SECTION 9.6. Sales of Inventory.................................................................................83
SECTION 9.7. Ownership and Defense of Title.....................................................................83
SECTION 9.8. Insurance..........................................................................................84
SECTION 9.9. Location of Offices and Collateral.................................................................84
SECTION 9.10. Records Relating to Collateral.....................................................................85
SECTION 9.11. Inspection.........................................................................................85
SECTION 9.12. Information and Reports............................................................................86
SECTION 9.13. Power of Attorney..................................................................................86
SECTION 9.14. Additional Real Estate and Leases..................................................................87
SECTION 9.15. Assignment of Claims Act...........................................................................88
SECTION 9.16. 1997 Projects......................................................................................88
ARTICLE 10 AFFIRMATIVE COVENANTS....................................................................................89
SECTION 10.1. Preservation of Corporate Existence and Similar Matters............................................89
SECTION 10.2. Compliance with Applicable Law.....................................................................89
SECTION 10.3. Maintenance of Property............................................................................89
SECTION 10.4. Conduct of Business................................................................................89
SECTION 10.5. Insurance..........................................................................................89
SECTION 10.6. Payment of Taxes and Claims........................................................................90
SECTION 10.7. Accounting Methods and Financial Records...........................................................90
SECTION 10.8. Use of Proceeds....................................................................................90
SECTION 10.9. Hazardous Waste and Substances; Environmental Requirements.........................................91
SECTION 10.10. Warranty Reserves.................................................................................91
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ARTICLE 11 INFORMATION............................................................................................. 92
SECTION 11.1. Financial Statements.............................................................................. 92
SECTION 11.2. Accountants' Certificate.......................................................................... 92
SECTION 11.3. Officer's Certificate............................................................................. 93
SECTION 11.4. Copies of Other Reports........................................................................... 93
SECTION 11.5. Notice of Litigation and Other Matters............................................................ 94
SECTION 11.6. ERISA............................................................................................. 94
SECTION 11.7. Accuracy of Information........................................................................... 95
SECTION 11.8. Revisions or Updates to Schedules................................................................. 95
ARTICLE 12 NEGATIVE COVENANTS...................................................................................... 96
SECTION 12.1. Financial Ratios.................................................................................. 96
SECTION 12.2. Indebtedness for Money Borrowed................................................................... 96
SECTION 12.3. Guaranties........................................................................................ 97
SECTION 12.4. Investments....................................................................................... 97
SECTION 12.5. Capital Expenditures.............................................................................. 97
SECTION 12.6. Restricted Dividend Payments and Purchases, Etc................................................... 97
SECTION 12.7. Merger, Consolidation and Sale of Assets.......................................................... 97
SECTION 12.8. Transactions with Affiliates...................................................................... 98
SECTION 12.9. Liens............................................................................................. 98
SECTION 12.10. Capitalized Lease Obligations.................................................................... 98
SECTION 12.11. Operating Leases................................................................................. 98
SECTION 12.12. [Reserved]....................................................................................... 98
SECTION 12.13. Plans............................................................................................ 98
SECTION 12.14. Sales and Leasebacks............................................................................. 98
SECTION 12.15. Factored Receivables............................................................................. 98
SECTION 12.16. Clean Down....................................................................................... 98
ARTICLE 13 DEFAULT................................................................................................. 99
SECTION 13.1. Events of Default................................................................................. 99
SECTION 13.2. Remedies..........................................................................................102
SECTION 13.3. Application of Proceeds...........................................................................105
SECTION 13.4. Power of Attorney.................................................................................105
SECTION 13.5. Miscellaneous Provisions Concerning Remedies......................................................106
ARTICLE 14 ASSIGNMENTS.............................................................................................108
SECTION 14.1. Successors and Assigns; Participations............................................................108
SECTION 14.2. Representation of Lenders.........................................................................111
ARTICLE 15 AGENT...................................................................................................112
SECTION 15.1. Appointment of Agent..............................................................................112
SECTION 15.2. Delegation of Duties..............................................................................112
SECTION 15.3. Exculpatory Provisions............................................................................112
SECTION 15.4. Reliance by Agent.................................................................................112
SECTION 15.5. Notice of Default.................................................................................113
SECTION 15.6. Non-Reliance on Agent and Other Lenders...........................................................113
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SECTION 15.7. Indemnification...................................................................................114
SECTION 15.8. Agent in Its Individual Capacity..................................................................114
SECTION 15.9. Successor Agent...................................................................................114
SECTION 15.10. Notices from Agent to Lenders....................................................................115
ARTICLE 16 MISCELLANEOUS...........................................................................................116
SECTION 16.1. Notices...........................................................................................116
SECTION 16.2. Expenses..........................................................................................116
SECTION 16.3. Stamp and Other Taxes.............................................................................118
SECTION 16.4. Setoff............................................................................................118
SECTION 16.5. Litigation........................................................................................119
SECTION 16.6. Waiver of Rights..................................................................................119
SECTION 16.7. Consent to Advertising and Publicity..............................................................119
SECTION 16.8. Reversal of Payments..............................................................................120
SECTION 16.9. Injunctive Relief.................................................................................120
SECTION 16.10. Accounting Matters...............................................................................120
SECTION 16.11. Amendments.......................................................................................120
SECTION 16.12. Performance of Borrower's Duties.................................................................122
SECTION 16.13. Indemnification..................................................................................122
SECTION 16.14. All Powers Coupled with Interest.................................................................122
SECTION 16.15. Survival.........................................................................................122
SECTION 16.16. Titles and Captions..............................................................................123
SECTION 16.17. Severability of Provisions.......................................................................123
SECTION 16.18. Governing Law....................................................................................123
SECTION 16.19. Counterparts.....................................................................................123
SECTION 16.20. Reproduction of Documents........................................................................123
SECTION 16.21. Increased Capital................................................................................124
SECTION 16.22. Pro-Rata Participation...........................................................................124
SECTION 16.23. Not an "Alabama" Transaction.....................................................................125
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ANNEX A PRICING MATRIX
ANNEX B WIRE TRANSFER PROCEDURE
EXHIBIT A FORM OF REVOLVING CREDIT NOTE
EXHIBIT C FORM OF BORROWING BASE CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL FOR BORROWER
EXHIBIT E FORM OF SETTLEMENT REPORT
Schedule 1.1A [RESERVED]
Schedule 1.1B Permitted Investments
Schedule 1.1C Permitted Liens
Schedule 5.2(c) Projections
Schedule 7.1(a) Organization
Schedule 7.1(b) Capitalization
Schedule 7.1(d) Subsidiaries; Ownership of Stock
Schedule 7.1(f) Compliance with Laws
Schedule 7.1(h) Governmental Approvals
Schedule 7.1(i) Title to Properties
Schedule 7.1(j) Liens
Schedule 7.1(k) Indebtedness and Guaranties
Schedule 7.1(l) Litigation
Schedule 7.1(m) Tax Matters
Schedule 7.1(q) ERISA
Schedule 7.1(u) Location of Offices and Receivables
Schedule 7.1(v) Location of Inventory
Schedule 7.1(w) Equipment
Schedule 7.1(x) Real Estate
Schedule 7.1(y) Corporate and Fictitious Names
Schedule 7.1(bb) Employee Relations
Schedule 7.1(cc) Proprietary Rights
Schedule 7.1(dd) Trade Names
Schedule 10.8 Use of Proceeds
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AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of August 28, 1997
MEADOWCRAFT, INC., a Delaware corporation, the financial
institutions party to this Agreement from time to time as Lenders, and
NATIONSBANK, N.A., a national banking association, as agent for the Lenders,
agree as follows:
Preliminary Statement
The Borrower, the Lenders (as of the Agreement Date) and the Agent
(each as hereinafter defined) are parties to a Loan and Security Agreement dated
as of August 16, 1995, as amended. The Borrower has requested, among other
things, an increase in the revolving and term credit facilities thereunder,
funding for additional construction projects, and changes in certain covenants
of the said Loan and Security Agreement.
The Lenders and the Agent have agreed to the Borrower's requests, upon
and subject to the terms, covenants and conditions hereinafter set forth. For
the convenience of all parties, the Borrower, the Lenders and the Agent have
agreed to amend and restate the said Loan and Security Agreement in its
entirety. This amendment and restatement is not intended to be and shall not be
construed as a refinancing, prepayment or novation of any indebtedness
outstanding under the said Loan and Security Agreement, but is only an amendment
and restatement of the terms applicable thereto.
Accordingly, in consideration of the said Loan and Security Agreement,
the advances and other financial accommodations made by the Lenders and
outstanding thereunder and the mutual promises contained in this Agreement, the
Borrower, the Lenders and the Agent hereby agree:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. For the purposes of this
Agreement:
"AAA Distribution" means one or more distributions by the
Borrower to its shareholders of amounts not exceeding in the aggregate, the
amount of the Borrower's undistributed earnings taxed to such shareholders for
the period October 1, 1986 through the completion date of the IPO (that is, the
entire period of the Borrower's effective election to be taxed as a subchapter S
corporation), declared to the extent of approximately $32.7 million prior to
completion of the IPO and as to the balance of such distributions, promptly upon
determination of the amount thereof.
"Account Debtor" means a Person who is obligated on a
Receivable.
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"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquiring or acquisition of such Business Unit or
Investment by purchase, exchange, issuance of stock or other securities, or by
merger, reorganization or any other method.
"Adjusted Net Worth" and "Adjusted Tangible Net Worth" mean,
respectively, the Consolidated Net Worth, and the Consolidated Tangible Net
Worth of the Borrower and its Consolidated Subsidiaries, less the amount
included therein for any amounts due from Affiliates.
"Advance" means amounts advanced by each Lender to the
Borrower under the Revolving Credit Facility as provided in ARTICLE 2 and shall
include Prime Rate Advances and Eurodollar Rate Advances.
"Affiliate" means, with respect to a Person, (a) any partner,
officer, shareholder (if holding more than 10% of the outstanding shares of
capital stock of such Person), director, employee or managing agent of such
Person, (b) any other Person (other than a Subsidiary) that, (i) directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such given Person, (ii)directly or indirectly
beneficially owns or holds 10% or more of any class of voting stock or
partnership or other voting interest of such Person or any Subsidiary of such
Person, or (iii) 10% or more of the voting stock or partnership or other voting
interest of which is directly or indirectly beneficially owned or held by such
Person or a Subsidiary of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or partnership or other voting interest, by contract or otherwise.
"Agency Account" means an account of the Borrower maintained
by it with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among the
Borrower, the Agent and a Clearing Bank, in form and substance satisfactory to
the Agent, concerning the collection of payments which represent the proceeds of
Receivables or of any other Collateral.
"Agent" means NationsBank, N.A., a national banking
association, and any successor agent appointed pursuant to SECTION 15.9.
"Agent's Office" means the office of the Agent specified in or
determined in accordance with the provisions of SECTION 16.1.
"Agreement" means this Agreement, including all Schedules,
Exhibits and other attachments hereto.
"Agreement Date" means the date as of which this Agreement is
dated.
"Alternative Revolver Rate" means at any time the lower of (i)
the Prime Rate at such time and (ii) the sum of the Federal Funds Effective Rate
at such time, plus the annual rate of interest appearing on the pricing matrix
attached hereto as ANNEX A under the caption "ARR" that is applicable at such
time.
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"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all governmental
bodies and of all orders and decrees of all courts and arbitrators, including,
without limitation, Environmental Laws.
"Applicable Margin" means (1) as applied to any Eurodollar
Rate Term Loan, (A) 1.375% per annum if Funded Debt to EBITDA is 2.0 to 1 or
greater and (B) 1.25% per annum if Funded Debt to EBITDA is lower than 2.0 to 1,
and (2) as applied to any Eurodollar Rate Loan outstanding under the Revolving
Credit Facility, the per annum rate indicated under the caption "Applicable
Margin" opposite the applicable Funded Debt to EBITDA on the pricing matrix
attached hereto as ANNEX A. Each change in the Applicable Margin shall become
effective as of the first day of a calendar month that is at least 10 days after
the date on which quarterly financial statements and the related officer's
certificate are delivered in accordance with SECTIONS 11.1(B) and 11.3(A),
respectively.
"Arizona Facility" means the manufacturing facility
constructed by the Borrower in 1997-1998, in Yuma, Arizona.
"Arizona L/C" means the letter of credit, as and when issued,
issued by NationsBank pursuant to SECTION 4.5.
"Arizona L/C Agreement" means the Letter of Credit and
Reimbursement Agreement pursuant to which the Arizona L/C, if any, is issued and
outstanding.
"Asset Disposition" means the disposition of any asset of the
Borrower or any of its Subsidiaries, other than sales of Inventory in the
ordinary course of business.
"Assignment and Acceptance" means an assignment and acceptance
assigning all or a portion of a Lender's interests, rights and obligations under
this Agreement pursuant to SECTION 14.1.
"Assignment of Factoring Proceeds" means the document by that
name, [dated the Agreement Date], as amended, among the Borrower, the Factor,
and the Agent.
"Assignment of Life Insurance Policy" means an assignment to
Agent, for the benefit of Lenders, in form and substance satisfactory to Agent,
of a key man life insurance policy on the life of Xxxxxxx XxXxxxx, in the face
amount of $5 million.
"Availability" means at any time (a) the Borrowing Base at
such time MINUS (b) the aggregate principal amount of Revolving Credit Loans
outstanding at such time.
"Benefit Plan" means an "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) in respect of
which the Borrower or any Related Company is, or within the immediately
preceding six years was, an "employer" as defined in Section 3(5) of ERISA,
including such plans as may be established after the Agreement Date.
"Xxxxxx" means X. Xxxxxxx Xxxxxx, party to the Support
Agreement.
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"Borrower" means Meadowcraft, Inc., a Delaware corporation,
and its successors and permitted assigns.
"Borrowing Base" means at any time an amount equal to the
lesser of:
(a) the Revolving Credit Facility MINUS the sum of
(i) the Letter of Credit Reserve, PLUS
(ii) any Interest Rate Protection Reserves, PLUS
(iii) the aggregate amount of the Environmental
Compliance Reserves, PLUS
(iv) such other reserves as the Agent in its
reasonable credit judgment shall establish from time to time,
and
(b) an amount equal to
(i) 93% (or such lesser percentage as the Agent
may in its absolute discretion determine from time to time) of
the face value of Factoring Credit Balances due and owing by
the Factor at such time, PLUS
(ii) 88% (or such lesser percentage as the Agent may
in its absolute discretion determine from time to time) of the
face value of Eligible Receivables due and owing at such time
by Walmart, Sam's Club, Home Depot, and Lowes, PLUS
(iii) in the months of March through September, 50%,
and in the months of October through February, 60% (or such
lesser percentage as the Agent may in its absolute discretion
determine from time to time) of the lesser of cost determined
on a FIFO (or first-in-first-out) accounting basis and fair
market value of Eligible Inventory, MINUS
(iv) the sum of
(A) the Letter of Credit Reserve, PLUS
(B) any Interest Rate Protection Reserves, PLUS
(C) the aggregate amount of the Environmental
Compliance Reserves, PLUS
(D) such other reserves as the Agent in its
reasonable credit judgment may establish from time to
time.
"Borrowing Base Certificate" means a certificate in the form
attached hereto as EXHIBIT C or in such other form as may be accepted to the
Agent.
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"Business Day" means any day other than a Saturday, Sunday or
other day on which banks in Atlanta, Georgia are authorized to close.
"Business Unit" means the assets constituting the business or
a division or operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than assets which constitute a Business Unit) which are not, in accordance with
GAAP, treated as expense items for such Person in the year made or incurred or
as a prepaid expense applicable to a future year or years.
"Capitalized Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented
by obligations under a Capitalized Lease, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Collateral" means collateral consisting of cash or Cash
Equivalents on which the Agent, for the benefit of itself as Agent and the
Lenders, has a first priority Lien.
"Cash Equivalents" means
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(b) commercial paper maturing no more than one year from the
date issued and, at the time of acquisition thereof, having a rating of
at least A-1 from Standard & Poor's Ratings Group or at least P-1 from
Xxxxx'x Investors Service, Inc.;
(c) certificates of deposit or bankers' acceptances issued in
Dollar denominations and maturing within one year from the date of
issuance thereof issued by any commercial bank organized under the laws
of the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $100
million and, unless issued by the Agent or a Lender, not subject to
set-off or offset rights in favor of such bank arising from any banking
relationship with such bank; and
(d) repurchase agreements in form and substance and for
amounts satisfactory to the Agent.
"Clearing Bank" means NationsBank and any other banking
institution with which an Agency Account has been established pursuant to an
Agency Account Agreement.
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"Collateral" means all of the Borrower's right, title and
interest in and to each of the following, wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Equipment,
(d) all Contract Rights,
(e) all General Intangibles,
(f) all Real Estate,
(g) all goods and other property, whether or not delivered,
(i) the sale or lease of which gives or purports to
give rise to any Receivable, including, but not limited to,
all merchandise returned or rejected by or repossessed from
customers, or
(ii) securing any Receivable,
including, without limitation, all rights as an unpaid vendor or lienor
(including, without limitation, stoppage in transit, replevin and
reclamation) with respect to such goods and other property,
(h) all mortgages, deeds to secure debt and deeds of trust on
real or personal property, guaranties, leases, security agreements, and
other agreements and property which secure or relate to any Receivable
or other Collateral, or are acquired for the purpose of securing and
enforcing any item thereof,
(i) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents and
instruments evidencing or pertaining to any and all items of
Collateral,
(j) all files, correspondence, computer programs, tapes, discs
and related data processing software which contain information
identifying or pertaining to any of the Receivables or any Account
Debtor, or showing the amounts thereof or payments thereon or otherwise
necessary or helpful in the realization thereon or the collection
thereof,
(k) all cash deposited with the Agent or any Lender or any
Affiliate of the Agent or any Lender or which the Agent, for the
benefit of the Lenders, or any Lender or such Affiliate is entitled to
retain or otherwise possess as collateral pursuant to the provisions of
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this Agreement or any of the Security Documents or any agreement
relating to any Letter of Credit, and
(l) any and all products and proceeds of the foregoing
(including, but not limited to, any claim to any item referred to in
this definition, and any claim against any third party for loss of,
damage to or destruction of any or all of, the Collateral or for
proceeds payable under, or unearned premiums with respect to, policies
of insurance) in whatever form, including, but not limited to, cash,
negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.
"Commitment" means, as to each Lender, the amount set forth
opposite such Lender's name on the signature pages hereof (or, from and after
the Effective Date, in the Register), representing such Lender's obligation,
upon and subject to the terms and conditions of this Agreement (including the
applicable provisions of SECTION 14.1), to make or maintain Revolving Credit
Loans, Interim Construction Loans and Term Loans and to maintain or purchase
participations in Letters of Credit and IRB L/Cs and its corresponding interest
in Term Loans outstanding.
"Commitment Percentage" means, as to any Lender, the
percentage of the Total Commitment obtained by dividing such Lender's Commitment
by the Total Commitment.
"Consolidated", when used with reference to financial accounts
means the sum of such financial account of the Borrower and its Consolidated
Subsidiaries, as consolidated after the elimination of intercompany items and,
in the case of Net Income and Tangible Net Worth, after appropriate deductions
for any minority interests in any Subsidiaries, and, when used with reference to
such accounts of any other Person, means the sum of such accounts of such Person
and its consolidated Subsidiaries as so adjusted.
"Consolidated Subsidiaries" means, as to the Borrower, the
Subsidiaries of the Borrower whose accounts are at the time in question, in
accordance with GAAP and pursuant to the written consent of the Required
Lenders, which consent may be withheld in their absolute discretion and which
may be conditioned upon, inter alia, the execution and delivery of guaranties,
security agreements, mortgages and other documents required by the Required
Lenders in their absolute discretion, consolidated with those of the Borrower.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
"Contract Rights" means any rights under contracts not yet
earned by performance and not evidenced by an instrument or chattel paper.
"Controlled Disbursement Account" means one or more accounts
maintained by and in the name of the Borrower with a Disbursing Bank for the
purposes of disbursing Revolving Credit Loan proceeds and other amounts
deposited thereto.
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"Copyrights" means, in each case whether now existing or
hereafter arising, all of the Borrower's right, title and interest in and to
(a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations and copyright
applications;
(b) all renewals of any of the foregoing;
(c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing, including,
without limitation, damages or payments for past or future
infringements of any of the foregoing;
(d) the right to xxx for past, present and future
infringements of any of the foregoing; and
(e) all rights corresponding to any of the foregoing
throughout the world.
"Debt" means:
(a) Indebtedness for money borrowed,
(b) Indebtedness, whether or not in any such case the same was
for money borrowed,
(i) represented by notes payable, and drafts
accepted, that represent extensions of credit,
(ii) constituting obligations evidenced by bonds,
debentures, notes or similar instruments, or
(iii) upon which interest charges are customarily
paid or that was issued or assumed as full or partial payment
for property (other than trade credit that is incurred in the
ordinary course of business),
(c) Indebtedness that constitutes a Capitalized Lease
Obligation, and
(d) Indebtedness that is such by virtue of CLAUSE (C) of the
definition thereof, but only to the extent that the obligations
Guaranteed are obligations that would constitute Debt.
"Debt Service" means, without duplication, for any period, the
sum of: (a) interest expense PLUS (b) current maturities of Funded Debt PLUS (c)
Permitted Subchapter S Distributions or cash dividends paid PLUS (d) cash
expenditures for federal and state income taxes in each case, for such period.
"Debt Service Coverage Ratio" means the ratio of EBITDA to
Debt Service.
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"Default" means any of the events specified in SECTION 13.1
which with the passage of time or giving of notice or both would constitute an
Event of Default.
"Default Margin" means 3.0%.
"Disbursing Bank" means any commercial bank with which a
Controlled Disbursement Account is maintained after the Effective Date.
"Dollar" and "$" means freely transferable United States
dollars.
"EBITDA" means Net Income before provision for interest
expense, income taxes, amortization and depreciation.
"Effective Date" means the later of:
(a) the Agreement Date, and
(b) the first date on which all of the conditions set forth in
ARTICLE 6 shall have been fulfilled.
"Effective Interest Rate" means each rate of interest per
annum on the Revolving Credit Loans and the Term Loans in effect from time to
time pursuant to the provisions of SECTIONS 5.1(A) and (B) and pursuant to the
Term Notes.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, having total assets
in excess of $1 billion or any commercial finance or asset based lending
affiliate of any such commercial bank; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, having a net worth of at least $250 million calculated in accordance
with GAAP; (iii) any Affiliate of NationsBank, NationsBanc Commercial
Corporation, or Fleet Financial Group, Inc., and any successor or assign of any
of them; and (iv) any Lender listed on the signature page of this Agreement;
PROVIDED in each case that the representation contained in SECTION 14.1(C)(I)
hereof shall be applicable with respect to such institution or Lender.
"Eligible Inventory" means the Borrower's Inventory which the
Agent, in its absolute discretion, determines to meet all of the following
requirements:
(a) such Inventory is owned by the Borrower, is stored at a
location listed on SCHEDULE 7.1(V), is subject to the Security
Interest, which is perfected as to such Inventory, and is subject to no
other Lien whatsoever other than a Permitted Lien,
(b) such Inventory consists of finished goods or raw materials
and not work-in- process, packing, hardware or supplies,
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(c) such Inventory is in good condition and meets all
standards imposed by any governmental agency, or department or division
thereof, having regulatory authority over such goods, their use or
sale,
(d) such Inventory is currently either usable or salable, at
prices approximating at least cost, in the normal course of the
Borrower's business and is not slow moving or stale,
(e) such Inventory is not obsolete or returned or repossessed
or used goods taken in trade,
(f) such Inventory is located within the United States at one
of the locations set forth in the most recent Schedule of Inventory,
(g) such Inventory is in the possession and control of the
Borrower and not any third party or if the Inventory is held by a third
party bailee and a negotiable instrument has not been issued with
respect to it (i) a financing statement which names the third party
bailee as the debtor/bailee, names the Borrower as the secured
party/xxxxxx, names the Agent as assignee of the secured party/xxxxxx
and contains a description of such Inventory acceptable to the Agent
and otherwise in compliance with the requirements of Section 9-304(3)
of the UCC has been filed in the appropriate filing office and (ii)
such other steps as the Agent may reasonably require in order to
establish and preserve the priority of the Security Interest against
secured creditors of the third party bailee or the Borrower shall have
been taken,
(h) if such Inventory is located in a warehouse or other
facility leased by the Borrower, the lessor has delivered to the Agent,
on behalf of the Lenders, a waiver and consent in form and substance
satisfactory to the Agent,
(i) such Inventory is not fabric located in Borrower's Selma,
Alabama location that has not been sold in 360 days or more, or has
been designated as noncurrent by the Borrower,
(j) such Inventory is not located at Borrower's Boaz, Alabama
location, and
(k) such Inventory is not determined by the Agent, on behalf
of the Lenders, in its absolute discretion to be ineligible for any
other reason.
"Eligible Receivable" means a Receivable owing to the Borrower
(which shall exclude any of the Borrower's accounts receivable sold to the
Factor) that consists of the unpaid portion of the obligation stated on the
invoice issued to an Account Debtor suitable to Agent in its sole discretion
with respect to Inventory sold and shipped to or services performed for such
Account Debtor in the ordinary course of business, net of any credits or rebates
owed by the Borrower to the Account Debtor and that the Agent, in its absolute
discretion determines to meet all of the following requirements:
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(a) such Receivable is owned by the Borrower and represents a
complete bona fide transaction which requires no further act under any
circumstances on the part of the Borrower to make such Receivable
payable by the Account Debtor,
(b) such Receivable has terms of 60 days or less and is no
more than 60 days past due,
(c) the goods the sale of which gave rise to such Receivable
were shipped or delivered to the Account Debtor on an absolute sale
basis and not on a xxxx and hold sale basis, a consignment sale basis,
a guaranteed sale basis, a sale or return basis, or on the basis of any
other similar understanding and no material part of such goods has been
returned or rejected,
(d) such Receivable is not evidenced by chattel paper or an
instrument of any kind,
(e) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action, threatened or pending,
which might, in the Agent's sole judgment, have a Materially Adverse
Effect on such Account Debtor, and is not, in the reasonable discretion
of the Agent, deemed ineligible for credit or other reasons,
(f) such Receivable is not owing by an Account Debtor having
50% or more in face value of its then-existing accounts owing to the
Borrower ineligible for any reason,
(g) with respect to any Receivable not owing by Walmart, Sam's
Club, Home Depot or Lowes, such Receivable shall not be deemed an
Eligible Receivable to the extent the then-existing accounts owing to
the Borrower by the Account Debtor thereon exceed in the aggregate in
face amount 20% of the Borrower's total Eligible Receivables plus the
Borrower's total Factoring Credit Balances,
(h) with respect to any Receivable owing by Walmart or Sam's
Club, such Receivable shall not be deemed an Eligible Receivable to the
extent the then-existing accounts owing to the Borrower by Walmart and
Sam's Club exceed in the aggregate in face amount 45% of the Borrower's
total Eligible Receivables plus the Borrower's total Factoring Credit
Balances,
(i) if such Receivable arises from the performance of
services, such services have been fully rendered and do not relate to
any warranty claim or obligation,
(j) such Receivable is not owing by an Account Debtor that is
located outside of the United States of America (for this purpose, the
Commonwealth of Puerto Rico shall be considered located within the
United States of America), unless such Receivable is backed by a letter
of credit, satisfactory to the Agent as to form, substance, and issuer,
that has been assigned to Agent in a manner satisfactory to Agent,
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(k) such Receivable is a valid, legally enforceable obligation
of the Account Debtor with respect thereto and is not subject to any
present or contingent (and no facts exist which are the basis for any
future) offset, deduction or counterclaim, dispute or other defense on
the part of such Account Debtor,
(l) such Receivable is subject to the Security Interest, which
is perfected as to such Receivable, and is subject to no other Lien
whatsoever other than a Permitted Lien,
(m) such Receivable is evidenced by an invoice or other
documentation in form acceptable to the Agent,
(n) the Receivable is not subject to the Assignment of Claims
Act of 1940, as amended from time to time, or any Applicable Law now or
hereafter existing similar in effect thereto, or to any other
prohibition (under Applicable Law, by contract or otherwise) against
its assignment or requiring notice of or consent to such assignment,
unless all such required notices have been given, all such required
consents have been received and all other procedures have been complied
with such that such Receivable shall have been duly and validly
assigned to the Agent, for the benefit of the Lenders,
(o) the goods giving rise to such Receivable were not, at the
time of the sale thereof, subject to any Lien, except the Security
Interest and Permitted Liens,
(p) such Receivable does not arise out of any transaction with
any Subsidiary, Affiliate, creditor, tenant, lessor or supplier of the
Borrower,
(q) the Borrower is not the beneficiary of any letter of
credit, except as permitted by clause (l) of this definition, nor has
any bond or other undertaking by a guarantor or surety been obtained,
supporting such Receivable and the Account Debtor's obligations in
respect thereof,
(r) such Receivable does not arise out of finance or similar
charges by the Borrower or other fees for the time value of money,
(s) such Receivable has not been charged back to the Borrower
by the Factor,
(t) the Account Debtor with respect to such Receivable is not
located in New Jersey or any other state denying creditors access to
its courts in the absence of qualification to transact business in such
state or the filing of a Notice of Business Activities Report or other
similar filing, unless the Borrower has either qualified as a foreign
corporation authorized to transact business in such state or has filed
a Notice of Business Activities Report or similar filing with the
applicable state agency for the then current year,
(u) such Receivable did not result from the sale of goods or
services at retail and is not subject to ss. 15-9-1 et seq., Code of
Alabama (1975) as amended (commonly known as the "Alabama Mini-Code"),
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(v) such Receivable is not owing by an Account Debtor who has
any of its accounts payable to the Borrower (but for the factoring
thereof) factored under the Factoring Agreement, and
(w) neither the Account Debtor with respect to such
Receivable, nor such Receivable, is determined by the Agent in its
absolute discretion to be ineligible for any other reason.
"Environmental Compliance Reserves" means reserves for the
cost of Remedial Action by the Borrower determined by the Agent from time to
time in its discretion based upon the reports delivered pursuant to SECTION
10.9(B) and such other advice, analysis and engineering studies as it deems
appropriate.
"Environmental Laws" means all federal, state, local and
foreign laws now or hereafter in effect relating to pollution or protection of
the environment, including laws relating to emissions, discharges, Releases or
threatened Releases of pollutants, Contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and any and
all regulations, notices or demand letters issued, entered, promulgated or
approved thereunder; such laws and regulations include but are not limited to
the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., as amended; the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., as amended; the Clean Air Act, 46 U.S.C. ss. 7401 et
seq., as amended; and state and federal lien and environmental cleanup programs.
"Environmental Lien" means a Lien in favor of any governmental
entity for (a) any liability under Environmental Laws or (b) damages arising
from, or costs incurred by such governmental entity in response to, a Release or
threatened Release of Contaminant into the environment.
"Equipment" means all machinery, apparatus, equipment, motor
vehicles, tractors, trailers, rolling stock, fittings, fixtures and other
tangible personal property (other than Inventory) of every kind and description
used in the Borrower's business operations or owned by the Borrower or in which
the Borrower has an interest, and all parts, accessories and special tools and
all increases and accessions thereto and substitutions and replacements
therefor.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Advance, for the Interest Period applicable thereto, a simple per annum interest
rate determined pursuant to the following formula:
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Eurodollar Rate = Interbank Offered Rate
-----------------------------------
1 - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Advance" means any Advance which bears
interest at the time in question computed with reference to the Eurodollar Rate.
"Eurodollar Rate Loan" means (a) any Revolving Credit Loan
consisting of Eurodollar Rate Advances and (b) the Term Loan (or any part
thereof) that bears interest at a rate computed with reference to the
Eurodollar.
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System, as such
regulation may be amended from time to time, or any successor regulation, as the
maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable to any member
bank with respect to Eurocurrency liabilities as that term is defined in
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of Eurodollar Rate Advances is
determined), whether or not any Lender has any Eurocurrency liabilities subject
to such reserve requirement at that time. Eurodollar Rate Advances shall be
deemed to constitute Eurocurrency liabilities and as such shall be deemed
subject to reserve requirements without the benefit of credits for proration,
exceptions or offsets that may be available from time to time to Agent.
"Event of Default" means any of the events specified in
SECTION 13.1, provided that any requirement for notice or lapse of time or any
other condition specified in SECTION 13.1 has been satisfied.
"Existing Loan Agreement" means the Loan and Security
Agreement dated as of August 16, 1995, as amended and in effect on the Effective
Date, to which the Borrower, the Agent and the Lenders are parties.
"Factor" means NationsBanc Commercial Corporation.
"Factoring Agreement" means the Amended and Restated Factoring
Agreement by and between the Factor and the Borrower, dated August 16, 1995, as
amended and in effect on the Agreement Date.
"Factoring Credit Balances" means the aggregate of the
outstanding Reserve Balance for accounts receivable factored by the Borrower
with the Factor at the Factor's credit risk.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve system arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding
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Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by NationsBank from three federal funds
brokers of recognized standing selected by NationsBank.
"Financed Capex" means Capital Expenditures financed by Debt
(other than the Loans).
"Financial Officer" means the chief financial officer,
Treasurer or Controller of the Borrower.
"Financing Statements" means any and all Uniform Commercial
Code financing statements, in form and substance satisfactory to the Agent,
executed and delivered by the Borrower to the Agent, naming the Agent, for the
benefit of the Lenders, as secured party and the Borrower as debtor, in
connection with this Agreement.
"fiscal year" of the Borrower means (i) at all times prior to
completion of the IPO, the period of 365 or 366 days beginning on the Sunday
after the Saturday closest to April 30 in one calendar year and ending on the
Saturday closest to April 30 in the following calendar year and (ii) after
completion of the IPO, each 12-month period ending July 31.
"Funded Debt" means, as applied to any Person, all outstanding
Debt of such Person.
"Funded Debt to EBITDA" means, as of the last day of any
fiscal quarter of the Borrower, the RATIO of (i) Funded Debt of the Borrower and
its Consolidated Subsidiaries on such day provided that Revolving Credit Loans
shall be included in Funded Debt in an amount equal to the monthly average
outstanding balance thereof during the period of four consecutive fiscal
quarters of the Borrower ended on such day TO (ii) EBITDA of the Borrower and
its Consolidated Subsidiaries for the period of four consecutive fiscal quarters
of the Borrower ended on such day.
"GAAP" means generally accepted accounting principles
consistently applied and maintained throughout the period indicated and, when
used with reference to the Borrower or any Subsidiary, consistent with the prior
financial practice of the Borrower, as reflected on the financial statements
referred to in SECTION 7.1(O); PROVIDED, HOWEVER, that, in the event that
changes shall be mandated by the Financial Accounting Standards Board or any
similar accounting authority of comparable standing, or shall be recommended by
the Borrower's independent public accountants, such changes shall be included in
GAAP as applicable to the Borrower only from and after such date as the
Borrower, the Required Lenders and the Agent shall have amended this Agreement
to the extent necessary to reflect any such changes in the financial covenants
set forth in ARTICLE 12.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Receivables), including, without limitation, all Proprietary
Rights, corporate or other business records, inventions, designs, blueprints,
plans, specifications, goodwill, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, reversions or any rights
thereto and any other amounts payable to the Borrower from
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any Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on
which the Borrower is beneficiary and any rights under any letter of credit,
guarantee, claims, security interest or other security held by or granted to the
Borrower to secure payment by an Account Debtor of any of the Receivables.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies, whether federal, state, local or foreign
national or provincial and all agencies thereof.
"Guaranty", as applied to any obligation of another Person,
means (and derivative words such as "Guaranteed" or to "Guarantee" refer to)
(a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business),
directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and
(b) an agreement, direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in
the event of nonperformance) of any part or all of such obligation of
such other Person whether by
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or
lessor) of property or the purchase or sale of services
primarily for the purpose of enabling the obligor with respect
to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on
account of any part or all of such obligation, or to assure
the owner of such obligation against loss,
(iii) the supplying of funds to or in any other
manner investing in the obligor with respect to such
obligation,
(iv) repayment of amounts drawn down by
beneficiaries of letters of credit, or
(v) the supplying of funds to or investing in a
Person on account of all or any part of such Person's
obligation under a Guaranty of any obligation or indemnifying
or holding harmless, in any way, such Person against any part
or all of such obligation.
"IPO" means the initial public offering of common stock of the
Borrower, in an underwritten offering completed in compliance with Applicable
Law (including without being limited to, applicable securities laws), the cash
proceeds of which to the Borrower are at least equal to the
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sum of (1) the AAA Distribution declared prior to the closing date of the
offering, plus (2) the costs and expenses of the offering.
"IRB L/Cs" means the Selma L/C and, if and when issued, the
Arizona L/C.
"IRB L/C Agreement" has the meaning specified in SECTION 3.10.
"Indebtedness" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following:
(a) all obligations for money borrowed or for the deferred
purchase price of property or services,
(b) all obligations (including, during the noncancellable term
of any lease in the nature of a title retention agreement, all future
payment obligations under such lease discounted to their present value
in accordance with GAAP) secured by any Lien to which any property or
asset owned or held by such Person is subject, whether or not the
obligation secured thereby shall have been assumed by such Person,
(c) all obligations of other Persons which such Person has
Guaranteed, including, but not limited to, all obligations of such
Person consisting of recourse liability with respect to accounts
receivable sold or otherwise disposed of by such Person,
(d) all obligations of such Person in respect of Interest Rate
Protection Agreements, and
(e) in the case of the Borrower (without duplication) all
obligations under the Revolving Credit Loans and the Term Loans.
"Installment Payment Date" means the first day of each
February, May, August and November, commencing on May 1, 1998.
"Interbank Offered Rate" means, for any Eurodollar Rate Loan
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.
If for any reason such rate is not available, the term "Interbank Offered Rate"
shall mean, for any Eurodollar Rate Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; PROVIDED, HOWEVER, is more than one rate as specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates..
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"Interest Payment Date" means the first day of each calendar
month commencing on October 1, 1997 and continuing thereafter until the Secured
Obligations have been irrevocably paid in full.
"Interest Period" means, in connection with any Eurodollar
Rate Advance, the term of such Advance selected by the Borrower or otherwise
determined in accordance with this Agreement, which may have a duration of one,
two, three or six months. Notwithstanding the foregoing, (A) any Interest Period
which would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day, (B) any Interest Period which begins on a day for which there is
no numerically corresponding day in the calendar month during which such
Interest Period is to end shall (subject to clause (A) above) end on the last
day of such calendar month, and (C) no Interest Period shall extend beyond the
Termination Date or such earlier date as would interfere hereunder with the
repayment obligations of the Borrower. Interest shall be due and payable with
respect to any Advance as provided in SECTION 5.1 hereof.
"Interest Rate Protection Agreement" means an interest rate
swap, cap or collar agreement or similar arrangement between the Borrower and a
Lender, providing for the transfer or mitigation of interest risks either
generally or under specific contingencies.
"Interest Rate Protection Reserve" means the aggregate amount
of the estimated liability of the Borrower and its Subsidiaries under all
Interest Rate Protection Agreements in effect on the date of determination, as
determined by the Agent applying its customary methodology.
"Interim Construction Facility" means the sum of: (1) the
lesser of (A) $6 million and (B) 75% of the construction cost of the 1997
Birmingham Warehouse plus 75% of the cost of Equipment installed therein PLUS
(2) the lesser of (A) $10.5 million and (B) 75% of the construction cost of the
Arizona Facility plus 75% of the cost of Equipment installed therein, PLUS (3)
the lesser of (A) $1.25 million and (B) 75% of the construction cost of the 1997
Birmingham Tubular Facility plus 75% of the cost of Equipment installed therein.
"Interim Construction Loan" means each loan made to the
Borrower pursuant to SECTION 4.2(B).
"Internal Revenue Code" means the Internal Revenue Code of
1986.
"Inventory" means all inventory as such term is defined in the
Uniform Commercial Code and shall include, without limitation,
(a) all goods intended for sale or lease by the Borrower, or
for display or demonstration,
(b) all work in process,
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(c) all raw materials and other materials and supplies of
every nature and description used or which might be used in connection
with the manufacture, packing, shipping, advertising, selling, leasing
or furnishing of such goods or otherwise used or consumed in the
Borrower's business, and
(d) all documents evidencing and general intangibles relating
to any of the foregoing.
"Investment" means, with respect to any Person:
(a) the acquisition or ownership by such Person of any share
of capital stock, evidence of Indebtedness or other security issued by
any other Person,
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person, excluding advances to
employees in the ordinary course of business for business expenses,
(c) any Guaranty of the obligations of any other Person,
(d) any other investment (other than the Acquisition of a
Business Unit) in any other Person, and
(e) any commitment or option to make any of the investments
listed in CLAUSES (A) through (D) above if, in the case of an option,
the consideration therefor exceeds $100.00.
"IRS" means the Internal Revenue Service.
"Lender" means at any time any financial institution party to
this agreement at such time, including any such Person becoming a party hereto
pursuant to the provisions of ARTICLE 14, and its successors and permitted
assigns, and "Lenders" means at any time all of the financial institutions party
to this Agreement at such time, including any such Persons becoming parties
hereto pursuant to the provisions of ARTICLE 14, and their successors and
permitted assigns.
"Letter of Credit" means any letter of credit issued by
NationsBank for the account of the Borrower (i) under the Existing Loan
Agreement and outstanding on the Effective Date (other than the Selma L/C) or
(ii) pursuant to ARTICLE 3.
"Letter of Credit Amount" means, with respect to any Letter of
Credit, the aggregate maximum amount at any time available for drawing under
such Letter of Credit.
"Letter of Credit Facility" means an amount equal to the
Revolving Credit Facility.
"Letter of Credit Obligations" means, at any time, the sum of
(a) the Reimbursement Obligations of the Borrower at such time, plus (b) the
aggregate Letter of Credit Amount of Letters of Credit outstanding at such time,
plus (c) the aggregate Letter of Credit Amount of Letters of
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Credit the issuance of which has been authorized by the Agent and NationsBank
pursuant to SECTION 3.4(B) but that have not yet been issued, in each case as
determined by the Agent.
"Letter of Credit Reserve" means, at any time, the aggregate
Letter of Credit Obligations at such time, other than Letter of Credit
Obligations that are fully secured by Cash Collateral.
"Liabilities" of any Person means all items (except for items
of capital stock, additional paid-in capital or retained earnings, or of general
contingency or deferred tax reserves) which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of which Liabilities are to be
determined.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust, lien,
pledge, charge, lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security
interest, security title or encumbrance of any kind in respect of any
property of such Person, or upon the income or profits therefrom,
(b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise
identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person,
(c) any Indebtedness which is unpaid more than 30 days after
the same shall have become due and payable and which if unpaid might by
law (including, but not limited to, bankruptcy and insolvency laws), or
otherwise, be given any priority whatsoever over the claims of general
unsecured creditors of such Person, and
(d) the filing of, or any agreement to give, any financing
statement under the Uniform Commercial Code or its equivalent in any
jurisdiction, excluding informational financing statements relating to
property leased by the Borrower.
"Loan" means any Revolving Credit Loan, any Interim
Construction Loan or any Term Loan, as well as all such loans collectively, as
the context requires.
"Loan Account" and "Loan Accounts" shall have the meanings
ascribed thereto in SECTION 5.4(A).
"Loan Documents" means collectively this Agreement, the Notes,
the Security Documents and each other instrument, agreement or document executed
by the Borrower, Xxxxxx or any Affiliate or Subsidiary of the Borrower in
connection with (i) the Existing Loan Agreement and which remains in effect on
the Effective Date or (ii) this Agreement, whether prior to, on or after the
Effective Date and each other instrument, agreement or document referred to
herein or contemplated hereby.
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27
"Loan Year" means each period of 12 consecutive months
commencing on the Effective Date and on each anniversary thereof.
"Lockbox" means each U.S. Post Office Box specified in a
Lockbox Agreement.
"Lockbox Agreement" means each agreement between the Borrower
and a Clearing Bank concerning the establishment of a Lockbox for the collection
of Receivables.
"Long-Term Liabilities" means, with respect to any Person, the
aggregate amount of all Liabilities of such Person other than Current
Liabilities.
"Margin Stock" means margin stock as defined in Section
221.1(h) of Regulation U, as the same may be amended or supplemented from time
to time.
"Materially Adverse Effect" means, with respect to any Person,
a materially adverse effect upon such Person's business, assets, liabilities,
condition (financial or otherwise), results of operations or business prospects,
and in addition (i) with respect to the Borrower, means a materially adverse
effect upon the Borrower's ability to perform its obligations hereunder or under
any other Loan Document to which it is a party or upon the enforceability of
such obligations against the Borrower and (ii) with respect to Xxxxxx, means a
materially adverse effect upon Xxxxxx'x ability to perform his obligations under
the Support Agreement.
"Minimum Commitment" means $10 million.
"Mortgages" means and includes any and all of the mortgages,
deeds of trust, deeds to secure debt, assignments and other instruments executed
and delivered by the Borrower to or for the benefit of the Agent by which the
Agent, on behalf of the Lenders, acquires a Lien on the Borrower's Real Estate
or a collateral assignment of the Borrower's interest under leases of Real
Estate, and all amendments, modifications and supplements thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or a Related Company is
required to contribute or has contributed within the immediately preceding six
years.
"NationsBank" means NationsBank, N.A., a national banking
association.
"Net Amount" means, with respect to any Investments made by
any Person, the gross amount of all such Investments MINUS the aggregate amount
of all cash received and the fair value, at the time of receipt by such Person,
of all property received as payments of principal or premiums, returns of
capital, liquidating dividends or distributions, proceeds of sale or other
dispositions with respect to such Investments.
"Net Income" means, as applied to any Person, the net income
(or net loss) of such Person for the period in question after giving effect to
deduction of or provision for all operating expenses, all taxes and reserves
(including reserves for deferred taxes), Permitted Subchapter S Distributions in
respect of shareholders' tax liabilities attributable to income of the Borrower,
and
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all other proper deductions, all determined in accordance with GAAP, provided
that there shall be excluded:
(a) the net income (or net loss) of any Person accrued prior
to the date it becomes a Subsidiary of, or is merged into or
consolidated with, the Person whose Net Income is being determined or a
Subsidiary of such Person,
(b) the net income (or net loss) of any Person in which the
Person whose Net Income is being determined or any Subsidiary of such
Person has an ownership interest, except, in the case of net income, to
the extent that any such income has actually been received by such
Person or such Subsidiary in the form of cash dividends or similar
distributions,
(c) any restoration of any contingency reserve, except to the
extent that provision for such reserve was made out of income during
such period,
(d) any net gains or losses on the sale or other disposition,
not in the ordinary course of business, of Investments, Business Units
and other capital assets, provided that there shall also be excluded
any related charges for taxes thereon,
(e) any net gain arising from the collection of the proceeds
of any insurance policy,
(f) any write-up of any asset, and
(g) any other extraordinary item.
"Net Outstandings" of any Lender means, at any time, the sum
of (a) all amounts paid by such Lender (other than pursuant to SECTION 15.7) to
the Agent in respect of Revolving Credit Loans or otherwise under this
Agreement, MINUS (b) all amounts paid by the Agent to such Lender which are
received by the Agent and which, pursuant to this Agreement, are paid over to
such Lender for application in reduction of the outstanding principal balance of
the Revolving Credit Loans.
"Net Proceeds" means proceeds received by the Borrower or any
of its Subsidiaries in cash from any Asset Disposition (including, without
limitation, payments under notes or other debt securities received in connection
with any Asset Disposition), net of: (a) the transaction costs of such sale,
lease, transfer or other disposition; (b) any sales tax liability arising from
such transaction; and (c) amounts applied to repayment of Indebtedness (other
than the Secured Obligations) secured by a Permitted Lien of the type described
in CLAUSES (D) and (E), of the definition "Permitted Liens" on the asset or
property disposed.
"Net Worth" means, with respect to any Person, such Person's
total shareholder's equity (including capital stock, additional paid-in capital
and retained earnings, after deducting treasury stock) which would appear as
such on a balance sheet of such Person prepared in accordance with GAAP.
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"1997 Birmingham Tubular Facility" means [DESCRIPTION].
"1997 Birmingham Warehouse" means [DESCRIPTION].
"1997 Projects" means the Arizona Facility, the 1997
Birmingham Tubular Facility and the 1997 Birmingham Warehouse.
"Non-Ratable Loan" means a Revolving Credit Loan made by
NationsBank in accordance with the provisions of SECTION 5.7(C)(II).
"Note" means any of the Revolving Credit Notes and the Term
Notes and "Notes" means more than one such Note.
"Operating Lease" means any lease (other than a lease
constituting a Capitalized Lease Obligation) of real or personal property.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"Patents" means and includes, in each case whether now
existing or hereafter arising, all of the Borrower's right, title and interest
in and to
(a) any and all patents and patent applications,
(b) inventions and improvements described and claimed therein,
(c) reissues, divisions, continuations, renewals, extensions
and continuations-in- part thereof,
(d) income, royalties, damages, claims and payments now or
hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past and future
infringements thereof,
(e) rights to xxx for past, present and future infringements
thereof, and
(f) all rights corresponding to any of the foregoing
throughout the world.
"Permitted Investments" means Investments of the Borrower in:
(a) negotiable certificates of deposit and time deposits
issued by NationsBank or by any United States bank or trust company
having capital, surplus and undivided profits in excess of $100
million,
(b) any direct obligation of the United States of America or
any agency or instrumentality thereof which has a remaining maturity at
the time of purchase of not more than one year and repurchase
agreements relating to the same,
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(c) sales of inventory on credit in the ordinary course of
business,
(d) shares of capital stock, evidence of Indebtedness or other
security acquired by the Borrower in consideration for or as evidence
of past-due or restructured Receivables in an aggregate face amount of
such Receivables at any time not to exceed $1 million,
(e) Guaranties permitted pursuant to SECTION 12.3,
(f) those items described on SCHEDULE 1.1B - PERMITTED
INVESTMENTS, and
(g) other Investments not in excess of $10,000 individually or
$50,000 in the aggregate in any fiscal year of the Borrower.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other governmental
charges or levies (excluding any Lien imposed pursuant to any of the
provisions of ERISA) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals
incurred in the ordinary course of business, but (i)in all cases only
if payment shall not at the time be required to be made in accordance
with SECTION 10.6, and (ii)in the case of warehousemen or landlords,
only if such liens are junior to the Security Interest in any of the
Collateral,
(b) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment
of, obligations under workers' compensation, unemployment insurance or
similar legislation or under payment or performance bonds,
(c) Liens constituting encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the
use of real property, which do not materially detract from the value of
such property or impair the use thereof in the business of the
Borrower, and other liens on the Real Estate specifically permitted in
the Mortgages,
(d) Purchase Money Liens,
(e) Liens shown on SCHEDULE 1.1C - PERMITTED LIENS, and
(f) Liens of the Agent, for the benefit of the Lenders,
arising under this Agreement and the other Loan Documents.
"Permitted Purchase Money Debt" means Purchase Money Debt of
the Borrower incurred after the Agreement Date
(a) which is secured by a Purchase Money Lien,
(b) the aggregate principal amount of which does not exceed an
amount equal to 100% of the lesser of
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(i) the cost (including the principal amount of such
Indebtedness, whether or not assumed) of the property (other
than Inventory) subject to such Lien, and
(ii) the fair value of such property (other than
Inventory) at the time of its acquisition, and
(c) which, when aggregated with the principal amount of all
other such Indebtedness and Capitalized Lease Obligations of the
Borrower at the time outstanding, does not exceed $3 million.
For the purposes of this definition, the principal amount of any Purchase Money
Debt consisting of Capitalized Leases shall be computed as a Capitalized Lease
Obligation.
"Permitted Subchapter S Distributions" means (i) amounts
distributed by the Borrower to its shareholders in respect of each fiscal year
of the Borrower in an amount not to exceed, in the aggregate, the liability of
its shareholders for federal and state income taxes attributable to the income
of the Borrower includable in the taxable income of such shareholders by reason
of the Borrower's effective election to be taxed as a Subchapter S corporation
under the Code, as amended from time to time and (ii) the AAA Distribution.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Borrower or any Related Company is, or
within the immediately preceding six years was, an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" means on any day the interest rate per annum
equal to the rate of interest publicly announced by the Agent at its head office
in Atlanta, Georgia as its "prime" rate, as in effect on the last Business Day
of the calendar month immediately preceding the month in which such day falls.
The Agent lends at rates above and below the Prime Rate.
"Prime Rate Advance" means an Advance bearing interest at the
Alternative Revolver Rate.
"Project Completion Date" means March 31, 1998 or such earlier
date on which the Borrower shall have certified to the Agent and the Lenders the
completion of all 1997 Projects pursuant to SECTION 4.1.
"Projections" means the forecasted (a) balance sheets, (b)
income statements, (c) cash flow statements, and (d) average balances of
Revolving Credit Loans of the Borrower for the Borrower's fiscal years ending
April 30, 1998 and thereafter, prepared on a monthly basis for the fiscal year
ending April 30, 1998 and on an annual basis for each fiscal year thereafter,
together with appropriate supporting details and a statement of underlying
assumptions, delivered to the Agent and the Lenders prior to the Agreement Date.
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"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: Patents, Copyrights, Trademarks, including,
without limitation, those Proprietary Rights set forth on SCHEDULE 7.1(CC)
hereto, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing, and all rights to xxx for past, present and future
infringement of any of the foregoing.
"Purchase Money Debt" means
(a) Indebtedness created to secure the payment of all or any
part of the purchase price of any property (other than Inventory),
(b) any Indebtedness incurred at the time of or within 30 days
prior to or after the acquisition of any property (other than
Inventory) for the purpose of financing all or any part of the purchase
price thereof, and
(c) any renewals, extensions or refinancings thereof, but not
any increases in the principal amounts thereof outstanding at the time
of any such renewal, extension or refinancing.
"Purchase Money Lien" means any Lien securing Purchase Money
Debt, but only if such Lien shall at all times be confined solely to the
property (other than Inventory) the purchase price of which was financed through
the incurrence of the Purchase Money Debt secured by such Lien.
"Real Estate" means all of the Borrower's now or hereafter
owned or leased estates in real property, including, without limitation, all
fees, leaseholds and future interests, together with all of the Borrower's now
or hereafter owned or leased interests in the improvements and emblements
thereon, the fixtures attached thereto and the easements appurtenant thereto,
including, without limitation the real property described on SCHEDULE 7.1(X).
"Receivables" means
(a) any and all rights to the payment of money or other forms
of consideration of any kind (whether classified under the Uniform
Commercial Code as accounts, contract rights, chattel paper, general
intangibles, or otherwise) including, but not limited to, accounts
receivable, letters of credit and the right to receive payment
thereunder, chattel paper, tax refunds, insurance proceeds, Contract
Rights, notes, drafts, instruments, documents, acceptances, and all
other debts, obligations and liabilities in whatever form from any
Person,
(b) all guarantees, security and Liens for payment thereof,
(c) all goods, whether now owned or hereafter acquired, and
whether sold, delivered, undelivered, in transit or returned, which may
be represented by, or the sale or lease of which may have given rise
to, any such right to payment or other debt, obligation or liability,
and
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(d) all proceeds of any of the foregoing.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System (or any successor).
"Reimbursement Agreement" means, with respect to a Letter of
Credit, such form of application therefor and form of reimbursement agreement
therefor (whether in a single document or several documents) as NationsBank may
employ in the ordinary course of business for its own account, with such
modifications thereto as may be agreed upon by NationsBank and the Borrower,
provided that such application and agreement and any modifications thereto are
not inconsistent with the terms of this Agreement.
"Reimbursement Obligations" means the reimbursement or
repayment obligations of the Borrower to NationsBank pursuant to SECTION 3.6 or
pursuant to a Reimbursement Agreement with respect to amounts that have been
drawn under Letters of Credit.
"Related Company" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as any Borrower; (ii) partnership or other
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with any Borrower; or
(iii) member of the same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as any Borrower, any corporation described
in CLAUSE (I) above or any partnership, trade or business described in CLAUSE
(II) above.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water or
groundwater.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Reportable Event" has the meaning set forth in Section
4043(b) of ERISA, but shall not include a Reportable Event as to which the
provision for 30 days notice to the PBGC is waived under applicable regulations.
"Required Lenders" means, at any time, all Lenders other than
any Lender who has failed to fund as required by this Agreement.
"Reserve Balance" means the net amount payable by the Factor
to the Borrower at any time for accounts receivable factored under the Factoring
Agreement, after accounting for customer disputes and other deductions.
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"Restricted Dividend Payment" means any dividend, distribution
or payment on or with respect to (a) any shares of a Person's capital stock
(other than dividends payable solely in shares of its capital stock) or (b) any
partnership interest in a Person, excluding, however, any such dividend,
distribution or payment to the Borrower by any Subsidiary of the Borrower.
"Restricted Payment" means (a) any redemption or prepayment or
other retirement, prior to the stated maturity thereof or prior to the due date
of any regularly scheduled installment or amortization payment with respect
thereto, of any Indebtedness for Borrowed Money or of any Indebtedness that is
junior and subordinate to the Secured Obligations, (b) the payment by any Person
of the principal amount of or interest on any Indebtedness (other than trade
debt) owing to a shareholder, partner or equity holder of such Person or to any
Affiliate of any such shareholder, partner or equity holder and (c) the payment
of any management, consulting or similar fee by any Person to any Affiliate of
such Person.
"Restricted Purchase" means any payment on account of the
purchase, redemption or other acquisition or retirement by a Person of any (a)
shares of such Person's capital stock (except shares acquired on the conversion
thereof into other shares of capital stock of such Person), (b) a partnership
interest in such Person, if such Person is a partnership, or (c) a membership
interest in such Person, if such Person is a limited liability company.
"Revolving Credit Facility" means the principal amount of $90
million or such lesser or greater amount as shall be agreed upon from time to
time in writing by the Agent, the Lenders and the Borrower.
"Revolving Credit Loans" means loans made to the Borrower
pursuant to SECTION 2.1.
"Revolving Credit Note" means each Revolving Credit Note made
by the Borrower payable to the order of a Lender evidencing the obligation of
the Borrower to pay the aggregate unpaid principal amount of the Revolving
Credit Loans made to it by such Lender (and any promissory note or notes that
may be issued from time to time in substitution, renewal, extension, replacement
or exchange therefor whether payable to such Lender or to a different Lender in
connection with a Person becoming a Lender after the Effective Date or
otherwise) substantially in the form of EXHIBIT A hereto, with all blanks
properly completed, either as originally executed or as the same may from time
to time be supplemented, modified, amended, renewed, extended or refinanced.
"Schedule of Inventory" means a schedule delivered by the
Borrower to the Agent pursuant to the provisions of SECTION 9.12(B).
"Schedule of Receivables" means a schedule delivered by the
Borrower to the Agent pursuant to the provisions of SECTION 9.12(A).
"Secured Obligations" means, in each case whether now in
existence or hereafter arising,
(a) the principal of, and interest and premium, if any, on,
the Loans,
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(b) the Reimbursement Obligations, the Borrower's obligation
to reimburse drawings under the IRB L/Cs, and all other obligations of
the Borrower to the Agent or any Lender arising in connection with the
issuance of Letters of Credit or any IRB L/C,
(c) all obligations of the Borrower in respect of any Interest
Rate Protection Agreement, and
(d) all indebtedness, liabilities, obligations, covenants and
duties of the Borrower to the Agent or to the Lenders of every kind,
nature and description arising under or in respect of any of the Loan
Documents or the Banking Relationship, whether direct or indirect,
absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note,
and whether or not for the payment of money, including without
limitation, fees required to be paid pursuant to ARTICLE 5 and expenses
required to be paid or reimbursed pursuant to SECTION 16.2. For
purposes of this clause (d), the "Banking Relationship" means
obligations of the Borrower relating to MasterCard charges (not to
exceed $200,000 of outstanding charges) and checking and operating
account charges incurred by the Borrower to NationsBank in the ordinary
course of business.
"Security Documents" means each of the following:
(a) the Mortgages,
(b) the Mortgage Modifications,
(c) the Financing Statements,
(d) the Assignment of Life Insurance Policy,
(e) the Assignment of Factoring Proceeds,
(f) the Support Agreement, and
(g) each other writing executed and delivered by the Borrower
or any other Person securing the Secured Obligations.
"Security Interest" means the Liens of the Agent, for the
benefit of the Lenders, on and in the Collateral effected hereby or by any of
the Security Documents or pursuant to the terms hereof or thereof.
"Xxxxx Xxxxx" means $3,000,000 original principal amount of
Revenue Bonds, Series 1996-A (Meadowcraft, Inc.), issued by The Industrial
Development Board of the City of Selma.
"Selma L/C" means the letter of credit in the face amount of
$2,731,068.50 million as of the Effective Date issued by NationsBank for the
account of the Borrower in connection with the Xxxxx Xxxxx.
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"Selma L/C Agreement" means Letter of Credit and Reimbursement
Agreement dated January 1, 1996, pertaining to the Selma L/C, between the
Borrower and NationsBank.
"Settlement Date" means each Monday that is a Business Day
after the Effective Date selected by the Agent in its sole discretion subject to
and in accordance with the provisions of SECTION 5.7(C)(I) as of which a
Settlement Report is delivered by the Agent and on which settlement is to be
made among the Lenders in accordance with the provisions of SECTION 5.7.
"Settlement Report" means each report, substantially in the
form attached hereto as EXHIBIT E, prepared by the Agent and delivered to each
Lender and setting forth, among other things, as of the Settlement Date
indicated thereon and as of the next preceding Settlement Date, the aggregate
principal balance of all Revolving Credit Loans outstanding, each Lender's
Commitment Percentage thereof, each Lender's Net Outstandings and all
Non-Ratable Loans made, and all payments of principal, interest and fees
received by the Agent from the Borrower during the period beginning on such next
preceding Settlement Date and ending on such Settlement Date.
"Subordinated Indebtedness" means the Indebtedness of the
Borrower to National Bank of Commerce, Birmingham, Alabama, evidenced by the
Subordinated Notes, including principal thereof and interest and premium, if
any, thereon, together with any and all Indebtedness related thereto.
"Subordinated Notes" means the promissory notes dated
_____________, 19__ and _____________, 19__, respectively, one in the original
principal amount of $3 million, and one in the original principal amount of $1
million, executed by the Borrower in favor of National Bank of Commerce,
Birmingham, Alabama, as the same may be amended, modified, extended, renewed or
replaced from time to time with the consent of the Required Lenders.
"Subordination Agreement" means the Subordination Agreement
dated as of, ________, 1995 as confirmed effective as of the Effective Date, by
and among, the Agent, National Bank of Commerce, Birmingham, Alabama, and the
Borrower, as the same may be amended, modified or supplemented from time to time
with the consent of the Required Lenders.
"Subsidiary"
(a) when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of
the stock of any class or classes or 50% or more of other ownership
interests is owned of record or beneficially by such other Person, or
by one or more Subsidiaries of such other Person, or by such other
Person and one or more Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, (A)are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the
directors (or other individuals performing similar functions)
of such Person, even though the right so to vote has been
suspended by the happening of such a contingency, or (B)are
entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar
functions) of such Person,
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whether or not the right so to vote exists by reason of the
happening of a contingency, or
(ii) in the case of such other ownership interests,
if such ownership interests constitute a majority voting
interest, and
(b) when used without designation of ownership, means a
Subsidiary of the Borrower.
"Support Agreement" means the Support Agreement, in form and
substance satisfactory to the Agent, dated on or about August 16, 1995, made by
Xxxxxx in favor of the Agent, for the benefit of the Lenders, as amended by an
amendment entered into as of the Effective Date, providing, among other things,
for the termination of said Agreement upon completion of the IPO.
"Tangible Net Worth" means, as applied to the Borrower, the
Adjusted Net Worth of the Borrower and its Consolidated Subsidiaries at the time
in question, after excluding therefrom the amount of all intangible items
reflected therein, including, without limitation, all unamortized debt discount
and expense, unamortized research and development expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
unamortized excess cost of investment in non-Consolidated Subsidiaries over
equity at dates of acquisition and all similar items which should properly be
treated as intangibles in accordance with GAAP.
"Term Loan" means the Term Loans, as defined in and made under
the Existing Loan Agreement, outstanding on the Effective Date, plus the loans
made to the Borrower pursuant to SECTION 4.1(A) on the Effective Date, plus the
Interim Construction Loans.
"Term Loan Facility" means the sum of $13.9 million, plus $2
million, plus the Interim Construction Facility.
"Term Note " means each promissory note made by the Borrower
payable to the order of a Lender evidencing the obligation of the Borrower to
pay the aggregate unpaid principal amount of any Term Loan made to it by such
Lender (and any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor whether
payable to such Lender or to a different Lender in connection with a Person
becoming a Lender after the Effective Date or otherwise) substantially in the
form of EXHIBIT B hereto, with all blanks properly completed, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or refinanced.
"Termination Date" means August 28, 2000 or such earlier date
as all Secured Obligations shall have been irrevocably paid in full and the
Revolving Credit Facility shall have been terminated.
"Termination Event" means
(a) a Reportable Event, or
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(b) the filing of a notice of intent to terminate a Plan or
the treatment of a Plan amendment as a termination under Section 4041
of ERISA, or
(c) the institution of proceedings to terminate a Plan by the
PBGC under Section 4042 of ERISA, or the appointment of a trustee to
administer any Plan.
"Total Commitment" means the sum of the Commitments.
"Trademarks" means and includes in each case whether now
existing or hereafter arising, all of the Borrower's right, title and interest
in and to
(a) trademarks (including service marks), trade names and
trade styles and the registrations and applications for registration
thereof and the goodwill of the business symbolized by the trademarks,
(b) licenses of the foregoing, whether as licensee or
licensor,
(c) renewals thereof,
(d) income, royalties, damages and payments now or hereafter
due and/or payable with respect thereto, including, without limitation,
damages, claims and payments for past and future infringements thereof,
(e) rights to xxx for past, present and future infringements
thereof, including the right to settle suits involving claims and
demands for royalties owing, and
(f) all rights corresponding to any of the foregoing
throughout the world.
"Unfunded Vested Accrued Benefits" means with respect to any
Plan at any time, the amount (if any) by which
(a) the present value of all vested nonforfeitable benefits
under such Plan exceeds
(b) the fair market value of all Plan assets allocable to such
benefits,
all determined as of the then most recent valuation date for such Plan.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect from time to time in the State of Georgia.
"Warranty Reserves" means reserves on the Borrower's books for
the cost of defending and disposing of claims and actions for breach of express
or implied representation or warranty.
"Wholly-Owned Subsidiary" when used to determine the
relationship of a Subsidiary to a Person means a Subsidiary all of the issued
and outstanding shares (other than directors'
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qualifying shares) of the capital stock of which shall at the time be owned by
such Person or one or more of such Person's Wholly-Owned Subsidiaries or by such
Person and one or more of such Person's Wholly-Owned Subsidiaries.
SECTION 1.2. General. All terms of an accounting nature not
specifically defined herein shall have the meaning ascribed thereto by GAAP. The
terms accounts, chattel paper, contract rights, documents, equipment,
instruments, general intangibles and inventory, as and when used in this
Agreement or the Security Documents without being capitalized, shall have the
meanings given those terms in the Uniform Commercial Code. Unless otherwise
specified, a reference in this Agreement to a particular section or subsection
is a reference to that section or subsection of this Agreement, and the words
"hereof," "herein," "hereunder" and words of similar import, when used in this
Agreement, refer to this Agreement as a whole and not to any particular
provision, section or subsection of this Agreement. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter. Words
denoting individuals include corporations and other entities and vice versa.
References to any legislation or statute or code, or to any provisions of any
legislation or statute or code, shall include any modification or reenactment
of, or any legislative, statutory or code provision substituted for, such
legislation, statute or code or provision thereof. References to any document or
agreement (including this Agreement) shall include references to such document
or agreement as amended, novated, supplemented, modified or replaced from time
to time, so long as and to the extent that such amendment, novation, supplement,
modification or replacement is either not prohibited by the terms of this
Agreement or is consented to by the Required Lenders and the Agent. The word
"including" shall mean "including, without limitation." The term "ratable" (and
with corollary meaning, "ratably") as applied to the Lenders at any time, means
ratably according to the Lenders' respective Commitment Percentages at such
time.
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ARTICLE 2
REVOLVING CREDIT FACILITY
SECTION 2.1. Revolving Credit.
Loans. Upon the terms and subject to the conditions of, and in
reliance upon the representations and warranties made under, this Agreement,
each Lender agrees, severally, but not jointly, to make Revolving Credit Loans
to the Borrower from time to time from the Effective Date to but not including
the Termination Date, as requested or deemed requested by the Borrower in
accordance with the terms of SECTION 2.2, in amounts equal to such Lender's
Commitment Percentage of each such Loan requested or deemed requested hereunder
up to an aggregate amount at any one time outstanding equal to such Lender's
Commitment Percentage of the Borrowing Base; PROVIDED, HOWEVER, that the
aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to the Loans requested) shall not exceed the Borrowing Base. It is
expressly understood and agreed that the Lenders intend to use the Borrowing
Base as a maximum ceiling on Revolving Credit Loans to the Borrower; PROVIDED,
HOWEVER, that it is agreed that should the Revolving Credit Loans exceed the
ceiling so determined or any other limitation set forth in this Agreement, such
Revolving Credit Loans shall nevertheless constitute Secured Obligations and, as
such, shall be entitled to all benefits thereof and security therefor. The
principal amount of any Revolving Credit Loan which is repaid may be reborrowed
by the Borrower, subject to the terms and conditions of this Agreement, in
accordance with the terms of this SECTION 2.1. The Agent's and each Lender's
books and records reflecting the date and the amount of each Revolving Credit
Loan and each repayment of principal thereof shall constitute PRIMA FACIE
evidence of the accuracy of the information contained therein, subject to the
provisions of SECTION 5.4.
SECTION 2.2. Manner of Borrowing Revolving Credit Loans.
Borrowings under the Revolving Credit Facility shall be made as follows:
(a) Requests for Borrowing. A request for a borrowing shall be
made, or shall be deemed to be made, in the following manner:
(i) with respect to the initial Revolving Credit
Loan, the Borrower shall give the Agent prior notice of the
Effective Date, which notice shall be irrevocable, and, as to
subsequent Revolving Credit Loans, the Borrower may give the
Agent notice, before 2:00 p.m. (Atlanta time) on the proposed
borrowing date as to any Revolving Credit Loan consisting of
Prime Rate Advances or before 12:00 noon (Atlanta time) three
Business Days before the proposed borrowing date as to any
Revolving Credit Loan consisting of Eurodollar Rate Advances,
of its intention to borrow, specifying the amount of the
proposed borrowing and the proposed borrowing date and, if
applicable, the Interest Period for the Eurodollar Rate
Advances comprising such borrowing,
(ii) whenever a check or other item is presented to a
Disbursing Bank for payment against a Controlled Disbursement
Account in an amount greater than the then available balance
in such account, such Disbursing Bank shall, and is hereby
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irrevocably authorized by the Borrower to, give the Agent
notice thereof, which notice shall be deemed to be a request
for a Revolving Credit Loan consisting of Prime Rate Advances
on the date of such notice in an amount equal to the excess of
such check or other item over such available balance,
(iii) unless payment is otherwise made by the
Borrower, the becoming due of any amount required to be paid
under this Agreement or any of the Notes as interest shall be
deemed to be a request for a Revolving Credit Loan consisting
of Prime Rate Advances on the due date in the amount required
to pay such interest,
(iv) unless payment is otherwise made by the
Borrower, the becoming due of any other Secured Obligation
shall be deemed to be a request for a Revolving Credit Loan
consisting of Prime Rate Advances on the due date in the
amount then so due, and such request shall be irrevocable, and
(v) the receipt by the Agent of notification from
NationsBank to the effect that a drawing has been made under a
Letter of Credit or under an IRB L/C and that the Borrower has
failed to reimburse NationsBank therefor in accordance with
the terms of the Letter of Credit or IRB L/C, the
Reimbursement Agreement or IRB L/C Agreement and ARTICLE 3,
shall be deemed to be a request for a Revolving Credit Loan
consisting of Prime Rate Advances on the date such
notification is received in the amount of such drawing which
is so unreimbursed;
PROVIDED that if any notice referred to in CLAUSE (I) above is received
after 2:00 p.m. (Atlanta time) on the proposed borrowing date, the
proposed borrowing will be postponed automatically to the next Business
Day. Unless the Agent has elected periodic settlements pursuant to
SECTION 5.7, the Agent shall promptly notify the Lenders of any notice
of borrowing given or deemed given pursuant to this SECTION 2.2(A) by
2:30 p.m. (Atlanta time) on the proposed borrowing date. Not later than
3:30 p.m. (Atlanta time) on the proposed borrowing date, each Lender
will make available to the Agent, for the account of the Borrower, at
the Agent's Office in funds immediately available to the Agent, an
amount equal to such Lender's Commitment Percentage of the Revolving
Credit Loans to be made on such borrowing date.
(b) Disbursement of Loans. The Borrower hereby irrevocably
authorizes the Agent to disburse the proceeds of each borrowing requested, or
deemed to be requested, pursuant to this SECTION 2.2 as follows:
(i) the proceeds of each borrowing requested under
SECTIONS 2.2(A)(I) or (II) shall be disbursed by the Agent in
Dollars in immediately available funds, (A) in the case of the
initial borrowing, in accordance with the terms of the letter
from the Borrower to the Agent referred to in SECTION
6.1(F)(XVIII), and (B) in the case of each subsequent
borrowing, by wire transfer to a Controlled Disbursement
Account or, in the absence of a Controlled Disbursement
Account, by wire transfer to such other account as may be
agreed upon by the Borrower and the Agent from time to time,
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(ii) the proceeds of each borrowing deemed requested
under SECTION 2.2(A)(III) or (IV) shall be disbursed by the
Agent by way of direct payment of the relevant interest or
Secured Obligation, as the case may be, and
(iii) the proceeds of each borrowing deemed requested
under SECTION 2.2(A)(V) shall be disbursed by the Agent
directly to NationsBank on behalf of the Borrower.
SECTION 2.3. Repayment of Revolving Credit Loans. The
Revolving Credit Loans will be repaid as follows:
(a) Whether or not any Default or Event of Default has
occurred, the outstanding principal amount of all the Revolving Credit
Loans is due and payable, and shall be repaid by the Borrower in full,
not later than the Termination Date;
(b) If at any time the aggregate outstanding unpaid principal
amount of the Revolving Credit Loans exceeds the Borrowing Base in
effect at such time, the Borrower shall repay the Revolving Credit
Loans in an amount sufficient to reduce the aggregate unpaid principal
amount of such Revolving Credit Loans by an amount equal to such
excess, together with accrued and unpaid interest on the amount so
repaid to the date of repayment;
(c) Unless otherwise specified by the Borrower, except as
otherwise required by SECTION 5.1(C)(IV) and except for repayments made
under SECTION 5.1(C)(VII), amounts repaid hereunder shall first be
applied to Prime Rate Advances, and shall be applied to Eurodollar Rate
Advances only to the extent that the amount repaid exceeds the
principal amount of Prime Rate Advances outstanding at the time of such
payment (and to the extent that amounts repaid are applied to
Eurodollar Rate Advances, Borrower shall pay any amounts required by
SECTION 5.1(C)(V)); and
(d) The Borrower hereby instructs the Agent to repay the
Revolving Credit Loans outstanding on any day in an amount equal to the
amount received by the Agent on such day pursuant to SECTION 9.1(B).
SECTION 2.4. Revolving Credit Note. Each Lender's Revolving
Credit Loans and the obligation of the Borrower to repay such Revolving Credit
Loans shall also be evidenced by a Revolving Credit Note payable to the order of
such Lender. Each Revolving Credit Note shall be dated the Effective Date and be
duly and validly executed and delivered by the Borrower.
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ARTICLE 3
LETTER OF CREDIT FACILITY; IRB L/CS
SECTION 3.1. Agreement to Issue. Upon the terms and subject to
the conditions of, and in reliance upon the representations and warranties made
under, this Agreement, NationsBank agrees to issue for the account of the
Borrower one or more Letters of Credit in accordance with this ARTICLE 3, from
time to time during the period commencing on the Effective Date and ending on
the Termination Date.
SECTION 3.2. Amounts. NationsBank shall not have any
obligation to issue any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the requested
Letter of Credit, (i) the aggregate Letter of Credit Obligations of the
Borrower would exceed the Letter of Credit Facility then in effect or
(ii) the aggregate principal amount of the Revolving Credit Loans
outstanding would exceed the Borrowing Base (after reduction for the
Letter of Credit Reserve in respect of such Letter of Credit); or
(b) which has a term longer than one calendar year or an
expiration date after the last Business Day that is more than 30 days
prior to the Termination Date.
SECTION 3.3. Conditions. The obligation of NationsBank to
issue any Letter of Credit is subject to the satisfaction of (i) the conditions
precedent contained in ARTICLE 6 and (ii) the following additional conditions
precedent in a manner satisfactory to the Agent and NationsBank:
(a) the Borrower shall have delivered to NationsBank and the
Agent at such times and in such manner as NationsBank or the Agent may
prescribe an application in form and substance satisfactory to
NationsBank and the Agent for the issuance of the Letter of Credit, a
Reimbursement Agreement and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed
Letter of Credit shall be satisfactory to NationsBank and the Agent;
and
(b) as of the date of issuance, no order of any court,
arbitrator or governmental authority having jurisdiction or authority
over NationsBank shall purport by its terms to enjoin or restrain banks
generally from issuing letters of credit of the type and in the amount
of the proposed Letter of Credit, and no law, rule or regulation
applicable to banks generally and no request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over banks generally shall prohibit, or request that
NationsBank refrain from, the issuance of letters of credit generally
or the issuance of such Letter of Credit.
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SECTION 3.4. Issuance of Letters of Credit.
(a) Request for Issuance. The Borrower shall give NationsBank
and the Agent written notice of the Borrower's request for the issuance
of a Letter of Credit no later than six Business Days prior to the
proposed date of issuance of the Letter of Credit. Such notice shall be
irrevocable and shall specify the original face amount of the Letter of
Credit requested, the effective date (which date shall be a Business
Day) of issuance of such requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in multiple draws, the
date on which such requested Letter of Credit is to expire (which date
shall be a Business Day earlier than the Business Day prior to the
Termination Date), the purpose for which such Letter of Credit is to be
issued and the beneficiary of the requested Letter of Credit. The
Borrower shall attach to such notice the form of the Letter of Credit
that the Borrower requests to be issued.
(b) Responsibilities of the Agent; Issuance. The Agent shall
determine, as of the Business Day immediately preceding the requested
effective date of issuance of the Letter of Credit set forth in the
notice from the Borrower pursuant to SECTION 3.4(A), the amount of the
unused Letter of Credit Facility and the Borrowing Base. If (i) the
form of the Letter of Credit delivered by the Borrower to the Agent is
acceptable to NationsBank and the Agent in their sole, reasonable
discretion, (ii) the undrawn face amount of the requested Letter of
Credit is less than or equal to the lesser of (A) the unused Letter of
Credit Facility and (B) the unused Borrowing Base and (iii) the Agent
has received a certificate from the Borrower stating that the
applicable conditions set forth in ARTICLE 6 have been satisfied, then
NationsBank will cause the Letter of Credit to be issued.
(c) Notice of Issuance. Promptly after the issuance of any
Letter of Credit, NationsBank shall give the Agent written or facsimile
notice, or telephonic notice confirmed promptly thereafter in writing,
of the issuance of such Letter of Credit, and the Agent shall give each
Lender written or facsimile notice, or telephonic notice confirmed
promptly thereafter in writing, of the issuance of such Letter of
Credit.
(d) No Extension or Amendment. No Letter of Credit shall be
extended or amended unless the requirements of this SECTION 3.4 are met
as though a new Letter of Credit were being requested and issued.
SECTION 3.5. Duties of NationsBank. Any action taken or
omitted to be taken by NationsBank under or in connection with any Letter of
Credit or IRB L/C, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not result in any liability of NationsBank to any
Lender or relieve any Lender of its obligations hereunder to NationsBank. In
determining whether to pay under any Letter of Credit or IRB L/C, NationsBank
shall have no obligation to any Lender other than to confirm that any documents
required to be delivered under such Letter of Credit or IRB L/C in connection
with such drawing have been presented and appear on their face to comply with
the requirements of such Letter of Credit.
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SECTION 3.6. Payment of Reimbursement Obligations.
(a) Payment to Issuer. Notwithstanding any provisions to the
contrary in any Reimbursement Agreement (but subject, as to any IRB
L/C, to the terms and conditions of the applicable IRB L/C Agreement),
the Borrower agrees to reimburse NationsBank for any drawings (whether
partial or full) under each Letter of Credit and each IRB L/C and
agrees to pay to NationsBank the amount of all other Reimbursement
Obligations and other amounts payable to NationsBank under or in
connection with such Letter of Credit or IRB L/C immediately when due,
irrespective of any claim, set-off, defense or other right which the
Borrower may have at any time against NationsBank or any other Person.
(b) Recovery or Avoidance of Payments. In the event that any
payment by or on behalf of the Borrower with respect to any Letter of
Credit (or any Reimbursement Obligation relating thereto) or IRB L/C
received by NationsBank, or by the Agent and distributed by the Agent
to the Lenders on account of their respective participations therein,
is thereafter set aside, avoided or recovered from NationsBank or the
Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent, for the account of the Agent or NationsBank, their respective
Commitment Percentages of such amount set aside, avoided or recovered
together with interest at the rate required to be paid by the Agent
upon the amount required to be repaid by it.
SECTION 3.7. Participations.
(a) Purchase of Participations. On the Effective Date, as to
all Letters of Credit and IRB L/Cs outstanding on the Effective Date,
and thereafter, immediately upon issuance by NationsBank of a Letter of
Credit or IRB L/C, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or warranty, an
undivided interest and participation in such Letter of Credit or IRB
L/C, equal to such Lender's Commitment Percentage of the face amount
thereof (including, without limitation, all obligations of the Borrower
with respect thereto, other than amounts owing to NationsBank under
SECTION 5.2(D)(II), and any security therefor or guaranty pertaining
thereto).
(b) Sharing of Payments. In the event that NationsBank makes a
payment under any Letter of Credit or IRB L/C and NationsBank shall not
have been repaid such amount pursuant to SECTION 3.6 or the applicable
IRB L/C Agreement, then NationsBank shall be deemed to have made a
Non-Ratable Loan in the amount of such payment, and notwithstanding the
occurrence or continuance of a Default or Event of Default at the time
of such payment, such Non-Ratable Loan shall be subject to the
provisions of SECTION 5.7(C) and the absolute obligations of the
Lenders to pay for their respective participation interests therein.
(c) Sharing of Reimbursement Obligation Payments. Whenever
NationsBank receives a payment from or on behalf of the Borrower on
account of a Reimbursement Obligation or a payment previously made
under an IRB L/C and unreimbursed by the
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Borrower as to which the Agent has previously received for the account
of NationsBank payment from a Lender pursuant to this SECTION 3.7,
NationsBank shall promptly pay to the Agent, for the benefit of such
Lender, such Lender's Commitment Percentage of the amount of such
payment from the Borrower in Dollars. Each such payment shall be made
by NationsBank on the Business Day on which NationsBank receives
immediately available funds pursuant to the immediately preceding
sentence, if received prior to 11:00 a.m. (Atlanta time) on such
Business Day and otherwise on the next succeeding Business Day.
(d) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, IRB L/C,
Reimbursement Agreement, IRB L/C Agreement or application for any
Letter of Credit or IRB L/C and such other documentation as may
reasonably be requested by such Lender.
(e) Obligations Irrevocable. The obligations of each Lender to
make payments to the Agent with respect to any Letter of Credit or any
IRB L/C and their participations therein pursuant to the provisions of
SECTION 5.7(C) hereof or otherwise and the obligations of the Borrower
to make payments to NationsBank or to the Agent, for the account of
Lenders, shall be irrevocable, shall not be subject to any
qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement (assuming, in the case
of the obligations of the Lenders to make such payments, that the
Letter of Credit has been issued in accordance with SECTION 3.4),
including, without limitation, any of the following circumstances:
(i) Any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or IRB L/C or any
transferee of any Letter of Credit or IRB L/C (or any Person
for whom any such transferee may be acting), any Lender,
NationsBank or any other Person, whether in connection with
this Agreement, any Letter of Credit, any IRB L/C or IRB L/C
Agreement the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between the Borrower or any other Person and the beneficiary
named in any Letter of Credit or IRB L/C);
(iii) Any draft, certificate or any other document
presented under the Letter of Credit or IRB L/C upon which
payment has been made in good faith and according to its terms
proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) The surrender or impairment of any Collateral
or any other security for the Secured Obligations or the
performance or observance of any of the terms of any of the
Loan Documents;
(v) The occurrence of any Default or Event of
Default; or
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(vi) The Agent's failure to deliver to the Lenders
the notice provided for in SECTION 3.4(C).
SECTION 3.8. Indemnification, Exoneration.
(a) Indemnification. In addition to amounts payable as
elsewhere provided in this ARTICLE 3, the Borrower agrees to protect,
indemnify, pay and save the Lenders and the Agent harmless from and
against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees)
which any Lender or the Agent may incur or be subject to as a
consequence, directly or indirectly, of
(i) the issuance of any Letter of Credit or IRB L/C,
other than as a result of its gross negligence or willful
misconduct, as determined by a court of competent
jurisdiction, or
(ii) the failure of NationsBank to honor a drawing
under any Letter of Credit or IRB L/C as a result of any act
or omission, whether rightful or wrongful, of any present or
future de jure or de facto governmental authority (all such
acts or omissions being hereinafter referred to collectively
as "Government Acts").
(b) Assumption of Risk by the Borrower. As among the Borrower,
the Lenders and the Agent, the Borrower assumes all risks of the acts
and omissions of, or misuse of any of the Letters of Credit or any IRB
L/C by the respective beneficiaries of such Letters of Credit and IRB
L/Cs. In furtherance and not in limitation of the foregoing, subject to
the provisions of the applications for the issuance of Letters of
Credit and the applicable terms of the respective IRB L/C Agreements,
the Lenders and the Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
Person in connection with the application for and issuance of
and presentation of drafts with respect to any of the Letters
of Credit or IRB L/C, even if it should prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or
forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign
any Letter of Credit or IRB L/C or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of
Credit or IRB L/C to comply duly with conditions required in
order to draw upon such Letter of Credit or IRB L/C;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher;
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(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or IRB L/C or of the proceeds
thereof;
(vii) the misapplication by the beneficiary of any
Letter of Credit or IRB L/C of the proceeds of any drawing
under such Letter of Credit or IRB L/C; or
(viii) any consequences arising from causes beyond
the control of the Lenders or the Agent, including, without
limitation, any Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of
any of the Agent's rights or powers under this SECTION 3.8.
(c) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action
taken or omitted by the Agent, NationsBank or any Lender under or in
connection with any of the Letters of Credit or any IRB L/C or any
related certificates, if taken or omitted in good faith, shall not
result in any liability of any Lender or the Agent to the Borrower or
relieve the Borrower of any of its obligations hereunder to any such
Person.
SECTION 3.9. Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of SECTION 3.2(B), any Letter of Credit or IRB
L/C is outstanding on the Termination Date, then on or prior to such Termination
Date, or if the Agent so demands while an Event of Default exists, then upon
demand by the Agent, the Borrower shall deposit with the Agent, for the ratable
benefit of the Lenders (ratable in accordance with their Commitment
Percentages), with respect to each Letter of Credit or IRB L/C then outstanding,
as the Agent shall specify, either (a) a standby letter of credit (a "Supporting
Letter of Credit") in form and substance satisfactory to the Agent, issued by an
issuer reasonably satisfactory to the Agent in an amount equal to the greatest
amount for which such Letter of Credit or IRB L/C may be drawn, under which
Supporting Letter of Credit the Agent is entitled to draw amounts necessary to
reimburse the Agent and the Lenders for payments made by the Agent and the
Lenders under such Letter of Credit and IRB L/C or under any reimbursement or
guaranty agreement with respect thereto, or (b) Cash Collateral in an amount
necessary to reimburse the Agent and the Lenders for payments made by the Agent
and the Lenders under such Letter of Credit or IRB L/C or under any
reimbursement or guaranty agreement with respect thereto. Such Supporting Letter
of Credit or Cash Collateral shall be held by the Agent for the ratable benefit
of the Lenders (ratable in accordance with their Commitment Percentages), as
security for, and to provide for the payment of, the Reimbursement Obligations.
In addition, the Agent may at any time after the Termination Date apply any or
all of such Cash Collateral to the payment of any or all of the Secured
Obligations then due and payable. At the Borrower's request, but subject to the
Agent's reasonable approval, the Agent shall invest any Cash Collateral
consisting of cash or any proceeds of Cash Collateral consisting of cash in Cash
Equivalents, and any commissions, expenses and penalties incurred by the Agent
in connection with any investment and redemption of such Cash Collateral shall
be Secured Obligations hereunder secured by the Collateral, shall bear interest
at the rates provided herein for the Loans and shall be
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charged to the Borrower's Loan Accounts, or, at the Agent's option, shall be
paid out of the proceeds of any earnings received by the Agent from the
investment of such Cash Collateral as provided herein or out of such cash
itself. The Agent makes no representation or warranty as to, and shall not be
responsible for, the rate of return, if any, earned on any Cash Collateral. Any
earnings on Cash Collateral shall be held as additional Cash Collateral on the
terms set forth in this SECTION 3.9.
SECTION 3.10. IRB Letters of Credit. Each IRB L/C and the
Borrower's and NationsBank's respective rights and obligations in respect
thereof shall be subject to a separate letter of credit and reimbursement
agreement (each, an "IRB L/C Agreement") between NationsBank and the Borrower,
entered into in connection with the issuance of such IRB L/C. In the case of any
conflict between the provisions of any IRB L/C Agreement and the provisions of
this ARTICLE 3 (other than such provisions as are inapplicable to IRB L/Cs), the
provisions of this ARTICLE 3 shall control.
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ARTICLE 4
TERM LOAN FACILITY
SECTION 4.1. Term Loan. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Lender agrees severally, but not jointly, (a) to
make a Term Loan to the Borrower on the Effective Date in a principal amount
equal to such Lender's Commitment Percentage of $2 million, (b) to continue as a
Term Loan, its Commitment Percentage of $13.9 million, being the entire
outstanding principal amount as of the Effective Date of Term Loans outstanding
under and as defined in the Existing Loan Agreement, and (c) to make additional
Term Loans to the Borrower from time to time after the Effective Date and on or
prior to the Project Completion Date, each in an amount equal to such Lender's
Commitment Percentage of the Interim Construction Loan requested by the
Borrower, PROVIDED that no Lender shall be obligated to maintain or make or have
outstanding, Term Loans in excess of such Lender's Commitment Percentage of the
Term Loan Facility.
SECTION 4.2. Manner of Borrowing Term Loans; Interim
Construction Loans.
(a) The Borrower shall give the Agent prior notice of the
Effective Date and the Agent shall promptly notify each Lender thereof.
Each Lender will make the amount equal to its Commitment Percentage of
the aggregate principal amount of the Term Loans to be made or
continued on the Effective Date (or the excess of such amount over the
aggregate principal amount of Term Loans (under and as defined in the
Existing Loan Agreement) owing to such Lender on the Effective Date, as
requested by the Agent) available to the Agent, for the account of the
Borrower, at the Agent's Office, prior to 12:00 noon (Atlanta time) on
the Effective Date in funds immediately available to the Agent. Not
later than 1:00 p.m. (Atlanta time) on the Effective Date, upon
satisfaction of the applicable conditions set forth in SECTIONS 6.1 and
6.2, the Agent will disburse the Term Loans to be made on the Effective
Date (or such aggregate excess), in same day funds in accordance with
the terms of the letter from the Borrower to the Agent referred to in
SECTION 6.1(F)(XVIII).
(b) Each request for an Interim Construction Loan shall be
made by written notice by the Borrower to the Agent (which shall
promptly notify each lender thereof) given not later than 2:00 p.m.
(Atlanta time) on the proposed borrowing date, of its intention to
borrow, specifying the amount of the proposed borrowing and the
proposed borrowing date, identifying the 1997 Project (or 1997
Projects) in respect of which such borrowing is being requested, and
certifying with respect to each 1997 Project in respect of which any
borrowing is requested, that the principal amount of such borrowing,
when added to the aggregate principal amount of all previous borrowings
attributable to such 1997 Project, does not exceed an amount equal to
the lesser of (i) the Dollar Amount for such 1997 Project set forth in
the definition "Interim Construction Facility" and (ii) 75% of the
total costs of construction and Equipment purchases and installation
set forth in the project description of such 1997 Project that has been
furnished to, and accepted by, the Agent and the Lenders prior to the
Effective Date.
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(c) Each Lender will make an amount equal to its Commitment
Percentage of the aggregate principal amount of Interim Construction
Loans to be made on each such borrowing date, available to the Agent,
for the account of the Borrower, at the office of the Agent, prior to
3:30 p.m. (Atlanta time) on the specified borrowing date in funds
immediately available to the Agent. Not later than 4:30 p.m. (Atlanta
time) on such borrowing date, upon satisfaction of the applicable
conditions set forth in SECTIONS 6.1 and 6.2, the Agent will disburse
the Interim Construction Loans in same day funds in accordance with the
terms of the notice of such borrowing from the Borrower to the Agent.
(d) As soon as available after the last day of each month
ending after the Effective Date and before the Project Completion Date,
but in no event later than the 20th day of the following month, and on
the Project Completion Date, the Borrower will deliver to the Agent a
report, in reasonable detail and otherwise in form and substance
satisfactory to the Agent, setting forth the (i) total cost of
construction and of Equipment purchases and installation for each 1997
Project reflected in the description of such 1997 Project delivered to
the Agent prior to the Agreement Date, (ii) the total amount of such
costs paid by the Borrower on or prior to such last day of the month or
the Project Completion Date, as the case may be, (iii) the percentage
(which may be the Borrower's good faith estimate thereof) of completion
of such 1997 Project (which shall be 100% on the Project Completion
Date), and (iv) the aggregate principal amount of Interim Construction
Loans outstanding with respect to such 1997 Project. The principal
amount of Interim Construction Loans outstanding on the Project
Completion Date shall continue as a portion of the Term Loan of each
Lender in such Lender's Commitment Percentage thereof after the Project
Completion Date, except to the extent that the report delivered in
accordance with this SECTION 4.2(D) on and as of the Project Completion
Date reflects any EXCESS of the outstanding principal amount of Interim
Construction Loans, OVER the Interim Construction Facility. Any such
excess shall be repaid by the Borrower not later than the first
Business Day after the Project Completion Date (including by
application of proceeds of a Revolving Credit Loan).
SECTION 4.3. Repayment of Term Loans.
The principal amount of the Term Loans shall be repaid in
accordance with the provisions of Term Notes EXCEPT that if the Term Notes refer
exclusively to this Agreement for such repayment terms, then the principal
amount of the Term Loans shall be repaid in consecutive quarterly installments
payable on each Installment Payment Date beginning on May 1, 1998, the first
such payment to be in an amount equal to $397,500 and each subsequent payment to
be in an amount equal to the greater of (i) $597,500 and (ii) the sum of
$397,500 plus 1/40th of the total principal amount of Interim Construction Loans
continued as a part of the Term Loan principal on the Project Completion Date,
PROVIDED, that the final such quarterly payment, payable on February 1, 2003,
shall be in the entire unpaid principal amount of the Term Loan then
outstanding.
SECTION 4.4. Term Notes. The Term Loans made, maintained or
continued and the Interim Construction Loans made by each Lender and the
obligation of the Borrower to
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repay such Loans shall also be evidenced by Term Notes payable to the order of
such Lender. Each such Term Note shall be dated the Effective Date (or any later
"effective date" of any Assignment and Acceptance pursuant to which such Note is
issued), and be duly and validly executed and delivered by the Borrower. As of
the Project Completion Date, the adjusted principal amount of the Interim
Construction Loans owing to each Lender shall also be evidenced by the Term Note
owing to such Lender.
SECTION 4.5. Arizona Bond Financing Option. The Borrower
shall have the right to convert a portion of the Term Loan Facility, and the
Interim Construction Facility to the extent relating to the Arizona Facility, to
a facility for a standby letter of credit supporting a lower floater industrial
revenue bond issue. To do so, the Borrower must notify the Agent and each
Lender, at least 30 days before the expected closing date of such bond
financing, of the Borrower's intention to exercise this option, and must finally
close such bond financing under this option on or before September 1, 2000. The
bond financing under this option (a) shall include letter-of-credit provisions
substantially the same as those in ARTICLE 3 (but with a separate credit limit
of up to $10 million, an expiry date of up to two years after the issuance date
(but nevertheless subject to Termination Date support substantially identical to
that specified in SECTION 3.9)), (b) shall be collateralized with all collateral
supporting the Term Loan Facility and the Interim Construction Facility to the
extent relating to the Arizona Facility, and (c) shall in all respects be
satisfactory in form and substance to the Agent and each Lender. Any such letter
of credit shall be renewable (by the Agent) annually, with the beneficiary
having the right to draw after any notice of non-renewal. Upon the closing of
the bond financing under this option, the Borrower shall repay the Term Loans
and any related Interim Construction Loan then outstanding to the extent related
to the Arizona Facility, and the Borrower, the Agent, and each Lender shall
execute and deliver any amendment to this Agreement with respect to such
financing that the Agent may reasonably specify in its discretion. All expenses
(including legal fees) relating to the bond financing contemplated by this
SECTION 4.5 and the issuance of the Arizona L/C, whether or not actually closed,
shall be payable by the Borrower under SECTION 16.2.
SECTION 4.6. Voluntary Prepayment of Term Loans. All
prepayments of the Term Loans shall be applied to the principal installments
payable thereon in inverse order of maturity. Any prepayment that the Borrower
directs be applied to the Interim Construction Loans outstanding prior to the
Project Completion Date, shall be applied permanently to reduce the Interim
Construction Facility allocable to the project specified by the Borrower in its
notice of prepayment.
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ARTICLE 5
GENERAL LOAN PROVISIONS
SECTION 5.1. Interest.
(a) Choice of Interest Rate for Revolving Credit Loans. Each
Advance that is part of a Revolving Credit Loan shall, at the option of
Borrower, be made as a Prime Rate Advance or a Eurodollar Rate Advance.
Eurodollar Rate Advances shall in all cases be subject to SECTION
5.1(C) hereof. Any notice given to the Agent in connection with a
requested Advance hereunder shall be given prior to 2:00 p.m. (Atlanta
time) in order for such Business Day to count toward the minimum number
of Business Days required. If Borrower fails to give the Agent timely
notice of its selection of a Eurodollar Rate, or if for any reason a
determination of a Eurodollar Rate for any Advance is not timely
concluded, the Alternative Revolver Rate shall apply to such Advance.
(b) Prime Rate Advances.
(i) Repayments and Reborrowings. The Borrower may
repay a Prime Rate Advance at any time and (A) reborrow all or
a portion of the principal amount thereof as one or more Prime
Rate Advances or Eurodollar Rate Advances, or (B) not reborrow
all or any portion of such Prime Rate Advance.
(ii) Prepayment. The principal amount of any Prime
Rate Advance may be prepaid in full or in part at any time
without penalty.
(c) Eurodollar Rate Advances.
(i) Advances. The Borrower shall give the Agent, in
the case of Eurodollar Rate Advances, at least three Business
Days irrevocable telephonic notice of its election confirmed
immediately in writing. The Agent, whose determination shall
be conclusive, shall determine the available Eurodollar Rate
and shall notify the Borrower of such Eurodollar Rate and the
Applicable Margin. The Borrower shall promptly notify the
Agent by telecopy or by telephone, and shall immediately
confirm any such telephonic notice in writing, of its
selection of a Eurodollar Rate and Interest Period for such
Advance.
(ii) Repayments and Reborrowings. At least three
Business Days prior to the maturity date for a Eurodollar Rate
Advance, the Borrower shall give the Agent written notice
specifying whether all or a portion of any Eurodollar Rate
Advance outstanding on such date (A) is to be continued in
whole or in part as a Eurodollar Rate Advance, (B) is to be
converted to a Prime Rate Advance, or (C) is to be repaid and
not reborrowed. Borrower's failure to give a proper notice
shall be deemed a request to convert the entire amount of such
Eurodollar Rate Advance into a Prime Rate Advance on the last
day of the applicable Interest Period.
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(iii) Limitation on Eurodollar Rate Advances. Each
Eurodollar Rate Advance shall be in an amount of not less than
$1 million or an integral multiple thereof.
(iv) Prepayment. Eurodollar Rate Advances may be
prepaid in whole or in part prior to the last day of the
applicable Interest Period, upon four Business Days prior
written notice to the Agent, PROVIDED that the Borrower shall
reimburse the Lenders, on the earlier of demand or the
Termination Date, an amount computed as provided in CLAUSE (I)
below. Any notice of prepayment of a Eurodollar Rate Advance
shall be irrevocable.
(i) Payments Not at End of Interest Period; Failure
to Borrow. If for any reason any payment of principal with
respect to any Eurodollar Rate Advance is made on any day
prior to the last day of the Interest Period applicable to
such Eurodollar Rate Advance or, after having given a Notice
of Borrowing with respect to any Revolving Credit Loan to be
comprised of Eurodollar Rate Advances or a notice of
conversion or continuation with respect to any Revolving
Credit Loan to be continued as or converted into Eurodollar
Rate Advances, such Revolving Credit Loan is not made or is
not continued as or converted into Eurodollar Rate Advances
due to the Borrower's failure to borrow or to fulfill the
applicable conditions set forth in ARTICLE 6, the Borrower
shall pay to Lenders, in addition to any amounts that may be
due hereunder, an amount (if a positive number) computed
pursuant to the following formula:
L = (R-T) x P x D
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360
L = amount payable
R = interest rate applicable to the
Eurodollar Rate Advance or Eurodollar Rate Loan
unborrowed or prepaid
T = effective interest rate per annum at
which any readily marketable bonds or other
obligations of the United States, selected
at the Agent's sole discretion, maturing on
or near the last day of the then applicable
or requested Interest Period for such Loan
and in approximately the same amount as such
Loan, can be purchased by such Lender on the
day of such payment of principal or failure
to borrow
P = the amount of principal paid or the
amount of the requested Loan
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D = the number of days remaining in
the Interest Period as of the date of such
payment or the number of days in the
requested Interest Period
The Borrower shall pay such amount upon presentation by the
Agent of a statement setting forth the amount and the Agent's
calculation thereof pursuant hereto, which statement shall be
deemed true and correct absent manifest error.
(v) Eurodollar Rate Determined Inadequate or
Unfair. Notwithstanding anything contained herein which may be
construed to the contrary, if with respect to any proposed
Eurodollar Rate Advance for any Interest Period, the Agent or
any Lender determines that deposits in Dollars (in the
applicable amount) are not being offered to the Agent in the
relevant market for such Interest Period on a basis sufficient
to permit a fair establishment of the Eurodollar Rate, the
Agent shall forthwith give notice thereof to Borrower,
whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist,
the obligations of the Lenders to make such Eurodollar Rate
Advances shall be suspended.
(vi) Illegality. If any applicable law, rule or
regulation, or any change therein, or any interpretation or
change in interpretation or administration thereof by any
governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by the Lenders with any request or directive
(whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it
unlawful or impossible any Lender to make, maintain or fund
its Eurodollar Rate Advances or Eurodollar Rate Loans, then
such Lender shall notify the Agent, the other Lenders, and the
Borrower. Upon receipt of such notice, notwithstanding
anything contained in SECTION 5.1 hereof, the Borrower shall
repay in full the then outstanding principal amount of each
affected Eurodollar Rate Advance, together with accrued
interest thereon either (a) on the last day of the then
current Interest Period applicable to such Eurodollar Rate
Advance if the Lenders may lawfully continue to maintain and
fund such Eurodollar Rate Advance to such day or (b)
immediately if the Lenders may not lawfully continue to fund
and maintain such Eurodollar Rate Advance, unless the Borrower
converts such outstanding Eurodollar Rate Advance to a Prime
Rate Advance pursuant to a right to do so hereunder.
(vii) Effect on Other Advances. If notice has been
given to the Borrower suspending the obligation of the Lenders
to make any Eurodollar Rate Advance, or requiring Eurodollar
Rate Advances to be repaid, then, unless and until the Agent
notifies the Borrower that the circumstances giving rise to
such repayment requirement no longer apply, all Advances which
would otherwise be made by the Lenders as Eurodollar Rate
Advances shall, at the option of the Borrower, be made instead
as Prime Rate Advances, or, if available, as another type of
fixed rate advance.
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(d) General Interest Provisions.
(i) The Borrower shall pay interest on the unpaid
principal amount of each Revolving Credit Loan for each day
from the day such Loan is made until such Loan is due (whether
at maturity, by reason of acceleration or otherwise), at a
rate per annum equal to (A) the Eurodollar Rate plus the
Applicable Margin or (B) or the Alternative Revolver Rate, as
elected by the Borrowers in accordance with the provisions set
forth herein. Interest on Prime Rate Advances shall be payable
monthly in arrears on each Interest Payment Date. Interest on
Eurodollar Rate Advances shall be payable on the last day of
such Interest Period. Interest accrued on Eurodollar Rate
Advances with Interest Periods of two, three or six months
shall be payable on each Interest Payment Date during the
Interest Period therefor and on the last day of such Interest
Period.
(ii) Interest on the Term Loan for each Interest
Period applicable thereto (or to any portion thereof) shall
accrue at the Eurodollar Rate plus the Applicable Margin and
shall be payable as provided for Eurodollar Rate Advances in
CLAUSE (I) above, provided that (A) prior to Project
Completion Date, any Interim Construction Loan that is
requested in an amount smaller than the minimum Eurodollar
Advance amount or at a time less than one full month prior to
the Project Completion Date shall bear interest at the
Alternative Revolver Rate payable as provided above for Prime
Rate Advances and (B) at any time after the Effective Date if
Eurodollar Rate Advances are not available pursuant to the
foregoing provisions of this SECTION 5.1, the Term Loan shall
bear interest at the Alternative Revolver Rate, payable as
provided above for Prime Rate Advances.
(iii) From and after the occurrence of an Event of
Default, except to the extent otherwise provided in the Term
Notes, the unpaid principal amount of each Secured Obligation
shall bear interest until paid in full (or, if earlier, until
such Event of Default is cured or waived in writing by the
Agent) at a rate per annum equal to the Default Margin plus
the Prime Rate, payable on demand. The interest rate provided
for in this SECTION 5.1(D)(III) shall to the extent permitted
by Applicable Law apply to and accrue on the amount of any
judgment entered with respect to any Secured Obligation.
(iv) The interest rates provided for in this SECTION
5.1 shall be computed on the basis of a year of 360 days and
the actual number of days elapsed.
(v) It is not intended by the Lenders, and nothing
contained in this Agreement or the Notes shall be deemed, to
establish or require the payment of a rate of interest in
excess of the maximum rate permitted by Applicable Law (the
"Maximum Rate"). If, in any month, the Effective Interest
Rate, absent such limitation, would have exceeded the Maximum
Rate, then the Effective Interest Rate for that month shall be
the Maximum Rate, and, if in future months, the Effective
Interest Rate would otherwise be less than the Maximum Rate,
then the Effective Interest Rate shall remain at the Maximum
Rate until such time as the amount of
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interest paid hereunder equals the amount of interest which
would have been paid if the same had not been limited by the
Maximum Rate. In the event, upon payment in full of the
Secured Obligations, the total amount of interest paid or
accrued under the terms of this Agreement is less than the
total amount of interest which would have been paid or accrued
if the Effective Interest Rate had at all times been in
effect, then the Borrower shall, to the extent permitted by
Applicable Law, pay to the Lenders an amount equal to the
excess, if any, of (i) the lesser of (A) the amount of
interest which would have been charged if the Maximum Rate
had, at all times, been in effect and (B) the amount of
interest which would have accrued had the Effective Interest
Rate, at all times, been in effect and (ii) the amount of
interest actually paid or accrued under this Agreement. In the
event the Lenders receive, collect or apply as interest any
sum in excess of the Maximum Rate, such excess amount shall be
applied to the reduction of the principal balance of the
Secured Obligations, and if no such principal is then
outstanding, such excess or part thereof remaining, shall be
paid to the Borrower.
SECTION 5.2. Certain Fees.
(a) Origination Fee. The Borrower shall pay to the Agent for
the ratable account of the Lenders, as additional consideration for the
new extensions of credit provided for hereunder, in addition to any
interest due under this Agreement, an origination fee in an amount
equal to 0.3% of (i) $2 million, payable on the Effective Date and (ii)
the aggregate principal amount of Interim Construction Loans continued
as part of the Term Loan on the Project Completion Date, payable on the
Project Completion Date. The origination fee shall be fully earned when
payable and shall not be subject to refund or rebate.
(b) Agent Fee. For administration and other services performed
by the Agent in connection with its continuing administration of this
Agreement, the Borrower shall pay to the Agent, for its own account,
and not for the account of the Lenders, an annual fee of 0.125% of the
amount of the Revolving Credit Facility on the payment date, payable
annually in advance on the Effective Date and on each anniversary of
the Effective Date for so long as any Secured Obligation shall remain
outstanding or the Revolving Credit Facility shall not have been
terminated. The fee payable pursuant to this SECTION 5.2(B) shall be
fully earned by the Agent on the date payment thereof is due and shall
not be subject to refund or rebate.
(c) Nonusage/Overusage. In connection with and as
consideration for the Lenders' reliance on the Borrower's use of its
projected amount of the Revolving Credit Facility, the Borrower will
pay a fee to the Agent, for the ratable account of the Lenders, for
each day from the Effective Date until the Termination Date, in an
amount equal to 1/8th% per annum of the amount by which the Borrower's
actual usage of Revolving Credit Loans, differs from (i.e., is less
than or greater than) the Borrower's projected usage of the Revolving
Credit Facility as shown in the Projections attached hereto as SCHEDULE
5.2(C). Such difference shall be computed for each calendar month (or
partial month, if the Effective Date or Termination Date falls in that
month) by adding the amount for each day by which the Borrower's actual
usage of the Revolving Credit Facility differs from the Borrower's
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projected usage (the amount for each day being a positive or negative
number or zero) and dividing that total by the number of days in the
month (such difference to be a positive number even if the foregoing
computation produces a negative number). Such fee for each calendar
month shall be payable on the following Interest Payment Date, and
shall be fully earned when due and payable and shall not be subject to
refund or rebate. Such fee is not, and shall not be deemed to be,
interest or a charge for the use of money.
(d) Letter of Credit Fees.
(i) The Borrower agrees to pay to the Agent for the
ratable benefit of the Lenders Letter of Credit fees equal to
the Applicable Margin applicable to Eurodollar Rate Advances
on the date on which a letter of Credit is issued (or renewed
or extended) on the face amount of each standby Letter of
Credit (except for workers' compensation Letters of Credit)
from time to time outstanding during the term of this
Agreement for the stated term thereof. The Borrower agrees to
pay to the Agent for the ratable benefit of the Lenders Letter
of Credit fees equal (A) to 1% per annum based on the average
daily aggregate Letter of Credit Amount of all workers'
compensation Letters of Credit and (B) .75% per annum on the
face amount of each commercial or documentary Letter of
Credit, in each case from time to time outstanding during the
term of this Agreement. Such fees shall be payable to the
Agent for the ratable benefit of the Lenders in accordance
with their respective Commitment Percentages in advance on the
date of issuance (or renewal or extension) of each Letter of
Credit and shall be calculated based on a year of 360 days and
the actual number of days elapsed.
(ii) The Borrower agrees to pay to Agent, for the
account of NationsBank, the standard fees and charges of
NationsBank for issuing, administering, amending, renewing,
paying, transferring and canceling letters of credit, as and
when assessed.
(e) Collateral Reporting Fee. The Borrower agrees to pay to
Agent for its own account, and not for the account of the Lenders, a
collateral reporting fee of $850.00 per month, payable in advance on
the first day of each month.
SECTION 5.3. Manner of Payment. Except as otherwise expressly
provided in SECTION 9.1(B), each payment (including prepayments) by the Borrower
on account of the principal of or interest on the Loans or of any other amounts
payable to the Lenders under this Agreement or any Note shall be made not later
than 12:00 noon (Atlanta time) on the date specified for payment under this
Agreement to the Agent, for the account of the Lenders, at the Agent's Office,
in Dollars, in immediately available funds and shall be made without any setoff,
counterclaim or deduction whatsoever. Any payment received after such time but
before 1:00 p.m. (Atlanta time) on such day shall be deemed a payment on such
date for the purposes of SECTION 13.1, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day.
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SECTION 5.4. Loan Accounts; Statements of Account.
(a) Each Lender shall open and maintain on its books a loan
account in the Borrower's name (each, a "Loan Account" and
collectively, the "Loan Accounts"). Each such Loan Account shall show
as debits thereto each Loan made under this Agreement by such Lender to
the Borrower and as credits thereto all payments received by such
Lender and applied to principal of such Loan, so that the balance of
the loan account at all times reflects the principal amount due such
Lender from the Borrower.
(b) The Agent shall maintain on its books a control account
for the Borrower in which shall be recorded (i)the amount of each
disbursement made hereunder, (ii)the amount of any principal or
interest due or to become due from the Borrower hereunder, and (iii)the
amount of any sum received by the Agent hereunder from the Borrower and
each Lender's ratable share therein.
(c) The entries made in the accounts pursuant to SUBSECTIONS
(A) and (B) shall be PRIMA FACIE evidence, in the absence of manifest
error, of the existence and amounts of the obligations of the Borrower
therein recorded and in case of discrepancy between such accounts, in
the absence of manifest error, the accounts maintained pursuant to
SUBSECTION (B) shall be controlling.
(d) The Agent will account separately to the Borrower monthly
with a statement of Loans, charges and payments made to and by the
Borrower pursuant to this Agreement, and such accounts rendered by the
Agent shall be deemed final, binding and conclusive, save for manifest
error, unless the Agent is notified by the Borrower in writing to the
contrary within 30 days of the date the account to the Borrower was so
rendered. Such notice by the Borrower shall be deemed an objection to
only those items specifically objected to therein. Failure of the Agent
to render such account shall in no way affect the rights of the Agent
or of the Lenders hereunder.
SECTION 5.5. Termination of Agreement. Subject to the
provisions of SECTION 5.9, the Borrower shall have the right, at any time, to
terminate this Agreement upon not less than 30 Business Days prior written
notice of its intention to terminate this Agreement, which notice shall specify
the effective date of such termination. Upon receipt of such notice, the Agent
shall promptly notify each Lender thereof. On the date specified in such notice,
such termination shall be effected, PROVIDED, that the Borrower shall, on or
prior to such date, pay to the Agent, for the benefit of the Lenders, ratably in
proportion to their ownership of all outstanding Secured Obligations, in same
day funds, an amount equal to all Secured Obligations then outstanding,
including, without limitation, all (i) accrued interest thereon, (ii) all
accrued fees provided for hereunder, and (iii)any amounts payable to the Lender
pursuant to SECTIONS 5.9, 16.2, 16.3 and 16.14, and, in addition thereto, shall
deliver to the Agent, in respect of each outstanding Letter of Credit, either a
Supporting Letter of Credit or Cash Collateral as provided in SECTION 3.9.
Following a notice of termination as provided for in this SECTION 5.5 and upon
payment in full of the amounts and delivery of Cash Collateral or a Supporting
Letter of Credit specified in this SECTION 5.5, this Agreement shall be
terminated and the Agent, the Lenders and the Borrower shall have no further
obligations
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to any other party hereto except for the Borrower's obligations to the Agent
and the Lenders pursuant to SECTION 16.15 hereof.
SECTION 5.6. Making of Loans.
(a) Nature of Obligations of Lenders to Make Loans.
The obligations of the Lenders under this Agreement to make the Loans
are several and are not joint or joint and several.
(b) Assumption by Agent. Subject to the provisions of SECTION
5.7 and notwithstanding the occurrence or continuance of a Default or
Event of Default or other failure of any condition to the making of
Revolving Credit Loans hereunder subsequent to the Effective Date,
unless the Agent shall have received notice from a Lender in
accordance with the provisions of SECTION 5.7(C) prior to a proposed
borrowing date that such Lender will not make available to the Agent
such Lender's ratable portion of the amount to be borrowed on such
date, the Agent may assume that such Lender will make such portion
available to the Agent in accordance with SECTION 2.2(A), and the
Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent
such Lender shall not make such ratable portion available to the
Agent, such Lender and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount (the "Make-Whole
Amount"), together with interest thereon for each day from the date
such amount is made available to the Borrower until the date such
amount is repaid to the Agent at the Effective Interest Rate (if paid
by the Borrower) or the Federal Funds Effective Rate (if paid by such
Lender) or (in either case), if lower, the Maximum Rate as defined in
SECTION 5.1(D). If such Lender shall repay to the Agent such
corresponding amount, the amount so repaid shall constitute such
Lender's Commitment Percentage of the Loan made on such borrowing date
for purposes of this Agreement. The failure of any Lender to make its
Commitment Percentage of any Loan available shall not (without regard
to whether a Borrower shall have returned the amount thereof to the
Agent in accordance with this SECTION 5.7) relieve it or any other
Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Loan available on such borrowing date, but no
Lender shall be responsible for the failure of any other Lender to
make its Commitment Percentage of such Loan available on the borrowing
date.
(c) Delegation of Authority to Agent. Without limiting the
generality of SECTION 15.1, each Lender expressly authorizes the Agent
to determine on behalf of such Lender (i) any change in advance rates
applicable to the Borrowing Base, so long as such advance rates do not
at any time exceed the rates set forth in the Borrowing Base
definition, (ii) the creation or elimination of any reserves (other
than the Letter of Credit Reserve) against the Revolving Credit
Facility and the Borrowing Base and (iii) whether or not Inventory or
Receivables shall be deemed to constitute Eligible Inventory or
Eligible Receivables. Such authorization may be withdrawn by the
Required Lenders by giving the Agent written notice of such withdrawal
signed by the Required Lenders; PROVIDED, HOWEVER, that unless
otherwise agreed by the Agent, such withdrawal of authorization shall
not become effective until the thirtieth Business Day after receipt of
such notice by the Agent. Thereafter, the Required Lenders shall
jointly instruct the Agent in writing regarding such matters with such
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frequency as the Required Lenders shall jointly determine. Unless and
until the Agent shall have received written notice from a Lender as to
the existence of a Default, an Event of Default or some other
circumstance which would relieve the Lenders of their respective
obligations to make Loans hereunder, which notice shall be in writing
and shall be signed by the such Lender giving the notice and shall
expressly state that such Lender does not intend to make available to
the Agent such Lender's ratable share of Loans made after the
effective date of such notice, the Agent shall be entitled to continue
to make the assumptions described in SECTION 5.6(B). After receipt of
the notice described in the preceding sentence, which shall become
effective on the second Business Day after receipt of such notice by
the Agent unless otherwise agreed by the Agent, the Agent shall be
entitled to make the assumptions described in SECTION 5.6(B) as to any
Loans as to which it has not received a written notice to the contrary
prior to 11:00 a.m. (Atlanta time) on the Business Day next preceding
the day on which the Loan is to be made. The Agent shall not be
required to make any Loan as to which it shall have received notice by
a Lender of such Lender's intention not to make its ratable portion of
such Loan available to the Agent. Any withdrawal of authorization
under this SECTION 5.6(C) shall not affect the validity of any Loans
made prior to the effectiveness thereof.
SECTION 5.7. Settlement Among Lenders.
(a) Term Loans. The Agent shall pay to each Lender its
ratable share (based on the principal amount of the Term Loans owing
to such Lender) of all payments received by the Agent hereunder in
immediately available funds in respect of the principal of, or
interest on, the Term Loans, net of any amounts payable by such Lender
to the Agent, by wire transfer of same day funds, not later than 2:00
p.m. (Atlanta time) on the same day received by the Agent, if received
prior to 1:00 p.m. (Atlanta time), otherwise on the following Business
Day.
(b) Revolving Credit Loans. It is agreed that each Lender's
Net Outstandings are intended by the Lenders to be equal at all times
to such Lender's Commitment Percentage of the aggregate principal
amount of all Revolving Credit Loans outstanding. Notwithstanding such
agreement, the several and not joint obligation of each Lender to fund
Revolving Credit Loans made in accordance with the terms of this
Agreement ratably in accordance with such Lender's Commitment
Percentage for Revolving Credit Loans and each Lender's right to
receive its ratable share of principal payments on Revolving Credit
Loans in accordance with its Commitment Percentage for Revolving
Credit Loans, the Lenders agree that in order to facilitate the
administration of this Agreement and the Loan Documents that
settlement among them may take place on a periodic basis in accordance
with the provisions of this SECTION 5.7.
(c) Settlement Procedures as to Revolving Credit Loans. To
the extent and in the manner hereinafter provided in this SECTION 5.7,
settlement among the Lenders as to Revolving Credit Loans may occur
periodically on Settlement Dates determined from time to time by the
Agent, which may occur before or after the occurrence or during the
continuance of a Default or Event of Default and whether or not all of
the conditions set forth in SECTION 6.2 have been met. On each
Settlement Date payments shall be made by
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or to NationsBank and the other Lenders in the manner provided in this
SECTION 5.7 in accordance with the Settlement Report delivered by the
Agent pursuant to the provisions of this SECTION 5.7 in respect of
such Settlement Date so that as of each Settlement Date, and after
giving effect to the transactions to take place on such Settlement
Date, each Lender's Net Outstandings shall equal such Lender's
Commitment Percentage of the Revolving Credit Loans outstanding.
(i) Selection of Settlement Dates. If the
Agent elects, in its discretion, but subject to the consent
of NationsBank, to settle accounts among the Lenders with
respect to principal amounts of Revolving Credit Loans less
frequently than each Business Day, then the Agent shall
designate periodic Settlement Dates which may occur on any
Business Day after the Effective Date; PROVIDED, HOWEVER,
that the Agent shall designate as a Settlement Date any
Business Day which is an Interest Payment Date; and PROVIDED
FURTHER, that a Settlement Date shall occur at least once
during each seven-day period. The Agent shall designate a
Settlement Date by delivering to each Lender a Settlement
Report not later than 12:00 noon (Atlanta time) on the
proposed Settlement Date, which Settlement Report will be in
the form of EXHIBIT E hereto and shall be with respect to the
period beginning on the next preceding Settlement Date and
ending on such designated Settlement Date.
(ii) Non-Ratable Loans and Payments. Between
Settlement Dates, the Agent shall request and NationsBank may
(but shall not be obligated to) advance to the Borrower out
of NationsBank's own funds, the entire principal amount of
any Revolving Credit Loan requested or deemed requested
pursuant to SECTION 2.2(A) (any such Revolving Credit Loan
being referred to as a "Non-Ratable Loan"). The making of
each Non-Ratable Loan by NationsBank shall be deemed to be a
purchase by NationsBank of a 100% participation in each other
Lender's Commitment Percentage of the amount of such
Non-Ratable Loan. All payments of principal, interest and any
other amount with respect to such Non-Ratable Loan shall be
payable to and received by the Agent for the account of
NationsBank. Upon demand by NationsBank, with notice thereof
to the Agent, each other Lender shall pay to NationsBank, as
the repurchase of such participation, an amount equal to 100%
of such Lender's Commitment Percentage of the principal
amount of such Non-Ratable Loan. Any payments received by the
Agent between Settlement Dates which in accordance with the
terms of this Agreement are to be applied to the reduction of
the outstanding principal balance of Revolving Credit Loans,
shall be paid over to and retained by NationsBank for such
application, and such payment to and retention by NationsBank
shall be deemed, to the extent of each other Lender's
Commitment Percentage of such payment, to be a purchase by
each such other Lender of a participation in the Revolving
Credit Loans (including the repurchase of participations in
Non-Ratable Loans) held by NationsBank. Upon demand by
another Lender, with notice thereof to the Agent, NationsBank
shall pay to the Agent, for the account of such other Lender,
as a repurchase of such participation, an amount equal to
such other Lender's Commitment Percentage of any such amounts
(after application thereof to the repurchase of any
participations of NationsBank in such other Lender's
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Commitment Percentage of any Non-Ratable Loans) paid only to
NationsBank by the Agent.
(iii) Net Decrease in Outstandings. If on any
Settlement Date the increase, if any, in the dollar amount of
any Lender's Net Outstandings which is required to comply
with the first sentence of SECTION 5.7(B) is less than such
Lender's Commitment Percentage of amounts received by the
Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Commitment
Percentage of such amounts to the increase in such Lender's
Net Outstandings, and NationsBank shall pay to the Agent, for
the account of such Lender, the excess allocable to such
Lender.
(iv) Net Increase in Outstandings. If on
any Settlement Date the increase, if any, in the dollar
amount of any Lender's Net Outstandings which is required to
comply with the first sentence of SECTION 5.7(B) exceeds such
Lender's Commitment Percentage of amounts received by the
Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Commitment
Percentage of such amounts to the increase in such Lender's
Net Outstandings, and such Lender shall pay to the Agent, for
the account of NationsBank, any excess.
(v) No Change in Outstandings. If a Settlement
Report indicates that no Revolving Credit Loans have been
made during the period since the next preceding Settlement
Date, then such Lender's Commitment Percentage of any amounts
received by the Agent but paid only to NationsBank shall be
paid by NationsBank to the Agent, for the account of such
Lender. If a Settlement Report indicates that the increase in
the dollar amount of a Lender's Net Outstandings which is
required to comply with the first sentence of SECTION 5.7(B)
is exactly equal to such Lender's Commitment Percentage of
amounts received by the Agent but paid only to NationsBank
since the next preceding Settlement Date, such Lender and the
Agent, in their respective records, shall apply such Lender's
Commitment Percentage of such amounts to the increase in such
Lender's Net Outstandings.
(vi) Return of Payments. If any amounts received
by NationsBank in respect of the Secured Obligations are
later required to be returned or repaid by NationsBank to the
Borrower or any other obligor or their respective
representatives or successors in interest, whether by court
order, settlement or otherwise, in excess of the
NationsBank's Commitment Percentage of all such amounts
required to be returned by all Lenders, each other Lender
shall, upon demand by NationsBank with notice to the Agent,
pay to the Agent for the account of NationsBank, an amount
equal to the excess of such Lender's Commitment Percentage of
all such amounts required to be returned by all Lenders over
the amount, if any, returned directly by such Lender.
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(vii) Payments to Agent, Lenders. (A) Payment by any
Lender to the Agent shall be made not later than 1:00 p.m.
(Atlanta time) on the Business Day such payment is due,
PROVIDED that if such payment is due on demand by another
Lender, such demand is made on the paying Lender not later
than 10:00 a.m. (Atlanta time) on such Business Day. Payment
by the Agent to any Lender shall be made by wire transfer,
promptly following the Agent's receipt of funds for the
account of such Lender and in the type of funds received by
the Agent, PROVIDED that if the Agent receives such funds at
or prior to 1:00 p.m. (Atlanta time), the Agent shall pay
such funds to such Lender by 2:00 p.m. (Atlanta time) on such
Business Day. If a demand for payment is made after the
applicable time set forth above, the payment due shall be
made by 2:00 p.m. (Atlanta time) on the first Business Day
following the date of such demand.
(A) If a Lender shall, at any time, fail to
make any payment to the Agent required hereunder,
the Agent may, but shall not be required to, retain
payments that would otherwise be made to such Lender
hereunder and apply such payments to such Lender's
defaulted obligations hereunder, at such time, and
in such order, as the Agent may elect in its sole
discretion.
(B) With respect to the payment of any
funds under this SECTION 5.7(B), whether from the
Agent to a Lender or from a Lender to the Agent, the
party failing to make full payment when due pursuant
to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on
such amount at the Federal Funds Effective Rate.
(d) Settlement of Other Secured Obligations. All other
amounts received by the Agent on account of, or applied by the Agent
to the payment of, any Secured Obligation owed to the Lenders
(including, without limitation, fees payable to the Lenders pursuant
to SECTIONS 5.2(C), (D), and (E) and proceeds from the sale of, or
other realization upon, all or any part of the Collateral following an
Event of Default) that are received by the Agent on or prior to 1:00
p.m. (Atlanta time) on a Business Day will be paid by the Agent to
each Lender on the same Business Day, and any such amounts that are
received by the Agent after 1:00 p.m. (Atlanta time) will be paid by
the Agent to each Lender on the following Business Day. Unless
otherwise stated herein, the Agent shall distribute fees payable to
the Lenders pursuant to SECTIONS 5.2(C) AND (D) ratably to the Lenders
based on each Lender's Commitment Percentage as described in such
Sections, and shall distribute proceeds from the sale of, or other
realization upon, all or any part of the Collateral following an Event
of Default ratably to the Lenders based on the amount of the Secured
Obligations then owing to each Lender.
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SECTION 5.8. Mandatory Prepayments.
(a) Prepayments from Asset Dispositions. Immediately upon
receipt by the Borrower or any of its Subsidiaries of the Net Proceeds
of any Asset Disposition, the Borrower shall apply such Net Proceeds
in prepayment of the Loans as provided in SECTION 5.8(C); PROVIDED,
HOWEVER, that the Borrower shall not be required to make such
prepayment to the extent that the Net Proceeds from Asset Dispositions
during any fiscal year of the Borrower do not exceed, in the
aggregate, $1 million. Concurrently with the making of any such
payment, the Borrower shall deliver to Agent a certificate of the
Borrower's Financial Officer demonstrating the calculations of the
amount required to be paid. Notwithstanding the foregoing, to the
extent that the gross proceeds from Asset Dispositions during any
fiscal year of the Borrower do not exceed, in the aggregate, $2
million, if the Borrower reasonably expects such proceeds to be
reinvested within six months of receipt in productive assets of a kind
then used or useable in the business of the Borrower and that are not
subject to any Lien other than the Security Interest in favor of the
Agent, for the benefit of the Lenders, than (a) to the extent such
proceeds do not exceed the balance from time to time of the Revolving
Credit Loan, such proceeds shall be applied to the repayment of the
outstanding balance of the Revolving Credit Loans and the Agent shall,
until such time as the reinvestment of such proceeds, establish a
reserve against the Borrowing Base in the amount of the proceeds so
applied and (b)to the extent such proceeds exceed the balance from
time to time of the Revolving Credit Loans, the Borrower shall deposit
such proceeds with the Agent to be held as Cash Collateral. Upon the
Borrower's reinvestment of such proceeds as described above, the Agent
shall (provided no Event of Default exists) release its security
interest in such Cash Collateral in respect of the reinvested funds
and shall eliminate the reserve against the Borrowing Base. To the
extent that the Borrower fails to reinvest such proceeds within six
months as provided above, the Borrower authorizes and directs the
Agent to eliminate such reserve, to apply the amount of the Cash
Collateral in respect of the unreinvested amount to the prepayment of
the Loans as provided in SECTION 5.8(C), to make Revolving Credit
Loans in an amount equal to the reserved amount that is not reinvested
and to apply the proceeds of such Revolving Credit Loans in prepayment
of the Loans as provided in SECTION 5.8(C).
(b) Prepayments from Equity Offerings. In the event that at
any time after the Effective Date, the Borrower issues capital stock
or other securities, other than as proceeds of the IPO, or receives an
additional capital contribution in respect of existing capital stock
or other securities, no later than the third Business Day following
the date of receipt of the proceeds from such issuance, the Borrower
shall apply such proceeds, net of underwriting discounts and
commissions and other reasonable costs associated therewith, in
prepayment of the Loans as provided in SECTION 5.8(C).
(c) Application of Proceeds of Prepayments. All prepayments
pursuant to this SECTION 5.8 shall be applied in the manner described
in SECTION 4.6, with any excess to be deposited with the Agent to be
held as Cash Collateral for the Secured Obligations and applied by the
Agent from time to time to outstanding Revolving Credit Loans promptly
upon the making of such Revolving Credit Loans or, after the
Termination Date, to any of the Secured Obligations in such manner as
the Agent shall determine in its sole discretion.
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SECTION 5.9. Early Termination Fee. If the Borrower prepays
the Loans in whole or in part prior to August 31, 2000, for any reason other
than in connection with the IPO or another equity offering under SECTION
5.8(B), the Borrower shall pay to the Agent for the ratable benefit of the
Lenders on such date of termination (in accordance with their Commitment
Percentages), as liquidated damages and compensation for the costs of making
funds available to the Borrower under this Agreement, and not as a penalty, an
amount equal to the percentage amount specified below for the date in which
such prepayment is made TIMES, in the case of a prepayment in part, the
principal amount of such prepayment or, in the case of a prepayment in full,
the sum of (a) the aggregate outstanding principal amount of the Term Loans
PLUS (b) the Revolving Credit Facility then in effect:
Date Percent
---- -------
On or before August 27, 1998 2%
August 28, 1998 to August 27, 1999 1%
For the purposes of this SECTION 5.9,
(a) the Revolving Credit Loans shall be deemed to have been
prepaid in part only on any day that the Borrower voluntarily reduces
the Revolving Credit Facility; and
(b) the amount of such deemed prepayment shall be in the case
of a deemed prepayment under CLAUSE (A) above, the amount by which the
Borrower voluntarily reduces the Revolving Credit Facility.
SECTION 5.10. Aggregate Amount of Loans and Letter of Credit
Obligations. The Agent and the Lenders shall not be required to make any Loan
or extend any Letter of Credit or IRB L/C that would cause the aggregate
principal amount of all Loans, Letter of Credit Obligations and Secured
Obligations in respect of IRB L/Cs outstanding, to exceed $126.35 million in
the aggregate.
SECTION 5.11. Funds Transfer Services.
(a) The Borrower acknowledges that the Lender has made available to it
as ANNEX B hereto a description of security procedures regarding funds
transfers executed by the Lender or an affiliate bank at the request of the
Borrower (the Security Procedures). The Borrower and the lender agree that the
Security Procedures are commercially reasonable. The Borrower further
acknowledges that the full scope of the Security Procedures which the Lender or
such affiliate bank offers and strongly recommends for funds transfers is
available only if the Borrower communicates directly with the Lender or such
affiliate bank as applicable in accordance with said procedures. If the
Borrower attempts to communicate by any other method or otherwise not in
accordance with the Security Procedures, the Lender or such affiliate bank, as
applicable, shall not be required to execute such instructions, but if the
Lender or such affiliate bank, as applicable, does so, the Borrower will be
deemed to have refused the Security Procedures that the Lender or such
affiliate bank as applicable offers and strongly recommends, and the Borrower
will be bound by any funds transfer, whether or not authorized, which is issued
in the Borrower's name and accepted by the Lender or such affiliate bank, as
applicable, in good faith. The Lender or such affiliate bank, as applicable,
may modify the Security Procedures at such time or times and in such manner as
the
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Lender or such affiliate bank, as applicable, in its sole discretion, deems
appropriate to meet prevailing standards of good banking practice. By
continuing to use the Lender's or such affiliate bank's, as applicable, wire
transfer services after receipt of any modification of the Security Procedures,
the Borrower agrees that the Security Procedures, as modified, are likewise
commercially reasonable. The Borrower further agrees to establish and maintain
procedures to safeguard the Security Procedures and any information related
thereto.
(b) The Lender or such affiliate bank, as applicable, will generally
use the Fedwire funds transfer system for domestic funds transfers, and the
funds transfer system operated by the Society for Worldwide International
Financial Telecommunication (SWIFT) for international funds transfers.
International funds transfers may also be initiated through the Clearing House
InterBank Payment System (CHIPs) or international cable. However, the Lender or
such affiliate bank, as applicable, may use any means and routes that the
Lender or such affiliate bank, as applicable, in its sole discretion, may
consider suitable for the transmission of funds. Each payment order, or
cancellation thereof, carried out through a funds transfer system or a
clearinghouse will be governed by all applicable funds transfer system rules
and clearing house rules and clearing arrangements, whether or not the Lender
or such affiliate bank, as applicable, is a member of the system, clearinghouse
or arrangement and the Borrower acknowledges that the Lender's of such
affiliate bank's, as applicable, right to reverse, adjust, stop payment or
delay posting of an executed payment order is subject to the laws, regulations,
rules, circulars and arrangements described herein.
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ARTICLE 6
CONDITIONS PRECEDENT
SECTION 6.1. Conditions Precedent to Effectiveness.
Notwithstanding any other provision of this Agreement, this Agreement will not
be effective and no Lender shall have any obligation to make or maintain any
Advance or Loan or participation in any Letter of Credit (or IRB L/C) until the
fulfillment of each of the following conditions:
(a) Fees. Borrower shall have paid all of the fees payable on
the Effective Date referred to herein (or payable under the Existing
Loan Agreement in connection with the termination thereof) and all
additional fees due in accordance with the terms of this Agreement.
(b) Capitalization. Borrower shall have a Net Worth of
not less than $29 million.
(c) Security Interests. The Agent shall have received
satisfactory evidence that the Agent (for the benefit of Lenders) has
a valid and perfected first priority security interest as of such date
in all of the Collateral, subject only to Permitted Liens.
(d) Closing Documents. The Agent shall have received
each of the following documents, all of which shall be satisfactory in
form and substance to the Agent and its special counsel and to the
Lenders:
(i) certified copies of the articles or
certificate of incorporation and bylaws of the Borrower as in
effect on the Effective Date,
(ii) certified copies of all corporate action,
including shareholder approval, if necessary, taken by the
Borrower to authorize the execution, delivery and performance
of this Agreement, the Loan Documents, and the borrowings
under this Agreement,
(iii) certificates of incumbency and specimen
signatures with respect to each of the officers of the
Borrower authorized to execute and deliver this Agreement and
the Loan Documents on behalf of the Borrower or other Person
executing any document, certificate or instrument to be
delivered in connection with this Agreement or the Loan
Documents and, in the case of the Borrower, to request
borrowings under this Agreement,
(iv) a certificate evidencing the good standing
of the Borrower in the jurisdiction of its incorporation and
in each other jurisdiction in which it is required to be
qualified as a foreign corporation to transact its business
as presently conducted,
(v) copies of all financial statements referred
to in SECTION 7.1(O) and meeting the requirements thereof,
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(vi) a signed opinion of counsel for the
Borrower, which counsel shall be satisfactory to Lenders,
substantially in the form of EXHIBIT D, and of such local
counsel for the Borrower, or for the Agent and the Lenders,
opining as to such matters in connection with the
transactions contemplated by this Agreement, as the Agent or
its special counsel shall reasonably request,
(vii) any additional Financing Statements
requested by the Agent, duly executed and delivered by the
Borrower and acknowledgment copies evidencing the filing of
such Financing Statements in each jurisdiction where such
filing may be necessary or appropriate to perfect the
Security Interest,
(viii) a certification from the principal officers
\ of the Borrower as to such factual matters as shall be
requested by the Agent,
(ix) certificates or binders of insurance
relating to each of the policies of insurance covering any of
the Collateral together with loss payable clauses which
comply with the terms of SECTION 9.8,
(x) a certificate of the President or a
Financial Officer of the Borrower stating that, to the best
of his knowledge and based on an examination sufficient to
enable him to make an informed statement,
(A) all of the representations and
warranties made or deemed to be made under this
Agreement are true and correct as of the Effective
Date, after giving effect to the Revolving Credit
Loan and the Term Loans, if any, to be made at such
time and the application of the proceeds thereof,
and
(B) no Default or Event of Default
exists,
(xi) a Borrowing Base Certificate, a Schedule of
Inventory and a Schedule of Receivables, prepared as of (or
within 30 days prior to) the Effective Date,
(xii) copies of each Mortgage Modification and
additional Mortgage duly executed and delivered by the
Borrower and evidencing the recording of each such instrument
in the appropriate jurisdiction for the recording thereof on
the Real Estate subject thereto or, at the option of the
Agent, in proper form for recording in such jurisdiction,
(xiii) one or more fully paid mortgagee title
insurance policies or, at the option of the Agent,
unconditional commitments for the issuance thereof with all
requirements and conditions to the issuance of the final
policy deleted or marked satisfied, issued by a title
insurance company satisfactory to the Agent, each in an
amount equal to not less than the fair market value of the
Real Estate subject to the Mortgage insured thereby, insuring
that such Mortgage (including any Mortgage as modified)
creates a valid first lien on, and security title to, all
Real Estate described
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therein, with no survey exceptions and no other exceptions
which the Agent shall not have approved in writing,
(xiv) such materials and information concerning
the Real Estate as the Agent may require, including, without
limitation, (A)current and accurate surveys satisfactory to
the Agent of all of the owned Real Estate, certified to the
Agent and showing the location of the 100-year and 50-year
flood plains thereon, (B) zoning letters as to the zoning
status of all of the owned Real Estate, (C) certificates of
occupancy covering all of the Real Estate, (D) owner's
affidavits as to such matters relating to the owned Real
Estate as the Agent may request, and (E) such other
requirements as are set forth in the Construction Loan
Agreements,
(xv) landlord's or mortgagee's waiver and
consent agreements duly executed on behalf of each landlord
or mortgagee, as the case may be, of Real Estate and any
other real property on which any Collateral is located,
(xvi) a letter, conforming to the requirements of
SECTION 10.8, from the Borrower to the Agent requesting any
Revolving Credit Loans or Term Loans to be made on the
Effective Date and specifying the method of disbursement,
(xvii) copies of each of the other Loan Documents
duly executed by the parties thereto, together with evidence
satisfactory to the Agent of the due authorization and
binding effect of each such Loan Document on such party, and
(xviii) such other documents and instruments as the
Agent or any Lender may reasonably request.
(e) Notes. Each Lender shall have received an Amended and
Restated Revolving Credit Note and an Amended, Restated and
Consolidated Term Note, each duly executed and delivered by the
Borrower, complying with the terms of SECTIONS 2.4 and 4.4, as
applicable.
(f) Subordination Agreement. The Agent shall have received a
confirmation of the Subordination Agreement, duly executed and
delivered by the Borrower and the subordinated creditor.
(g) Other Security Documents. The Agent shall have received
each other Security Document, duly executed and delivered by the
Borrower.
(h) Availability. The Agent shall be provided with evidence
satisfactory to it, confirmed by a certificate of a Financial Officer
of the Borrower, that as of the Effective Date the Availability, after
giving effect to the reasonably expected amount of the Letter of
Credit Reserve in effect 60 days after the Effective Date, is not less
than $100,000.
(i) No Injunctions, Etc. No action, proceeding,
investigation, regulation or legislation shall have been instituted,
threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain, or prohibit, or to obtain
damages in respect
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of, or which is related to or arises out of this Agreement or the
consummation of the transactions contemplated hereby or which, in the
Lenders' reasonable discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement.
(j) Material Adverse Change. As of the Effective Date, there
shall not have occurred any change which is materially adverse, in the
Lenders' sole discretion, to the assets, liabilities, businesses,
operations, condition (financial or otherwise) or prospects of the
Borrower from those presented by the unaudited financial statements of
the Borrower described in SECTION 7.1(O).
(k) Release of Security Interests. The Agent shall have
received evidence satisfactory to it of the release and termination of
all Liens other than Permitted Liens.
SECTION 6.2. All Loans; Letters of Credit. No Lender shall
have any obligation to make any Loan hereunder, and NationsBank shall
not have any obligation to issue any Letter of Credit or IRB L/C
hereunder, unless, at the time of making of such Loan (whether the
initial Revolving Credit Loan, a Term Loan, an Interim Construction
Loan or any subsequent Loan) or the issuance of such Letter of Credit
or IRB L/C:
(a) all of the representations and warranties made or deemed
to be made under this Agreement shall be true and correct at such time
both with and without giving effect to the Loan to be made at such
time and the application of the proceeds thereof,
(b) the corporate actions of the Borrower referred to in
SECTION 6.1 shall remain in full force and effect and the incumbency
of officers shall be as stated in the certificates of incumbency
delivered pursuant to SECTION 6.1 or as subsequently modified and
reflected in a certificate of incumbency delivered to the Agent,
(c) no Event of Default shall exist, and
(d) such Loan or Letter of Credit shall not cause the
aggregate principal amount of all Loans and Letter of Credit
Obligations outstanding to exceed $126.35 million in the aggregate.
Each request or deemed request for any borrowing or Letter of Credit hereunder
shall be deemed to be a certification by the Borrower to the Agent and the
Lenders as to the matters set forth in SECTION 6.2(A) and (B), and the Agent
may, without waiving either condition, consider the conditions specified in
SECTION 6.2(A) and (B) fulfilled and a representation by the Borrower to such
effect made, if no written notice to the contrary is received by the Agent
prior to the making of the Loan then to be made or the issuance of the Letter
of Credit then to be issued.
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 7.1. Representations and Warranties. The Borrower
represents and warrants to the Agent and to the Lenders as follows:
(a) Organization; Power; Qualification. The Borrower and each
of its Subsidiaries is a corporation, duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, having the power and authority to own its properties
and to carry on its business as now being and hereafter proposed to be
conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization. The
jurisdictions in which each of the Borrower and each of its
Subsidiaries is qualified to do business as a foreign corporation are
listed on SCHEDULE 7.1(A).
(b) Capitalization. The outstanding capital stock of the
Borrower has been duly and validly issued and is fully paid and
nonassessable, and the number and owners of such shares of capital
stock of the Borrower are set forth on SCHEDULE 7.1(B). The issuance
and sale of the Borrower's capital stock have been registered or
qualified under applicable federal and state securities laws or are
exempt therefrom.
(c) Subordinated Indebtedness. The Borrower has the corporate
power and authority to incur the Subordinated Indebtedness and to
issue the Subordinated Note. The issuance and sale of the Subordinated
Note have been registered or qualified under applicable federal and
state securities laws or are exempt therefrom. The Subordinated Note
is the legally valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with its terms
(including those pertaining to subordination). The Borrower has
delivered to the Agent a complete and correct copy of all documents
evidencing or relating to the Subordinated Indebtedness, and each of
the representations and warranties given by the Borrower therein is
true and correct in all material respects. The subordination
provisions of the Subordination Agreement will be enforceable against
the holder of the Subordinated Note. All of the Secured Obligations
constitute senior Indebtedness entitled to the benefits of
subordination created by the Subordination Agreement.
(d) Subsidiaries. SCHEDULE 7.1(D) correctly sets forth the
name of each Subsidiary of the Borrower, its jurisdiction of
incorporation, the name of its immediate parent or parents, and the
percentage of its issued and outstanding securities owned by the
Borrower or any other Subsidiary of the Borrower and indicating
whether such Subsidiary is a Consolidated Subsidiary. Except as set
forth on SCHEDULE 7.1(D),
(i) no Subsidiary of the Borrower has issued any
securities convertible into shares of such Subsidiary's
capital stock or any options, warrants or other rights to
acquire any shares or securities convertible into such
shares,
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(ii) the outstanding stock and securities of each
Subsidiary of the Borrower are owned by the Borrower or a
Wholly-Owned Subsidiary of the Borrower, or by the Borrower
and one or more of its Wholly-Owned Subsidiaries, free and
clear of all Liens, warrants, options and rights of others of
any kind whatsoever, and
(iii) the Borrower has no Subsidiaries.
The outstanding capital stock of each Subsidiary of the Borrower has
been duly and validly issued and is fully paid and nonassessable by
the issuer, and the number and owners of the shares of such capital
stock are set forth on SCHEDULE 7.1(D).
(e) Authorization of Agreement, Notes, Loan Documents and
Borrowing. The Borrower has the right and power, and has taken all
necessary action to authorize it, to execute, deliver and perform this
Agreement and each of the Loan Documents in accordance with their
respective terms. This Agreement and each of the Loan Documents have
been duly executed and delivered by the duly authorized officers of
the Borrower and each is, or each when executed and delivered in
accordance with this Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms.
(f) Compliance of Agreement, Notes, Loan Documents and
Borrowing with Laws, Etc. Except as set forth on SCHEDULE 7.1(F), the
execution, delivery and performance of this Agreement and each of the
Loan Documents in accordance with their respective terms and the
borrowings hereunder do not and will not, by the passage of time, the
giving of notice or otherwise,
(i) require any Governmental Approval or violate
any Applicable Law relating to the Borrower or any of its
Subsidiaries,
(ii) conflict with, result in a breach of or
constitute a default under the articles or certificate of
incorporation or by-laws of the Borrower or any of its
Subsidiaries,
(iii) conflict with, result in a breach of or
constitute a default under any material provisions of any
indenture, agreement or other instrument to which the
Borrower or any of its Subsidiaries is a party or by which
the Borrower, any of its Subsidiaries or any of the
Borrower's or such Subsidiaries' property may be bound or any
Governmental Approval relating to the Borrower or any of its
Subsidiaries, or
(iv) result in or require the creation or imposition
of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower other than the Security
Interest.
(g) Business. The Borrower is engaged principally in the
business of manufacturing furniture.
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(h) Compliance with Law; Governmental Approvals.
(i) Except as set forth in SCHEDULE 7.1(H), the Borrower and
each of its Subsidiaries
(A) has all Governmental Approvals, including
permits relating to federal, state and local Environmental
Laws, ordinances and regulations, required by any Applicable
Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on
appeal and is not the subject of any pending or, to the
knowledge of the Borrower, threatened attack by direct or
collateral proceeding, and
(B) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable
Laws relating to it, including, without being limited to, all
Environmental Laws and all occupational health and safety
laws applicable to the Borrower, any of its Subsidiaries or
their respective properties,
except for instances of noncompliance which would not, singly or in
the aggregate, cause a Default or Event of Default or have a
Materially Adverse Effect on the Borrower or any of its Subsidiaries
and in respect of which reserves in respect of the Borrower's or such
Subsidiary's reasonably anticipated liability therefor have been
established on the books of the Borrower or such Subsidiary, as
applicable.
(ii) Without limiting the generality of the above, except as
disclosed on a report delivered pursuant to SECTION 6.1(F)(XIX) or
(XX) or with respect to matters which could not reasonably be expected
to have, singly or in the aggregate, a Materially Adverse Effect on
the Borrower or any of its Subsidiaries:
(A) the operations of the Borrower and each of its
Subsidiaries comply in all material respects with all
applicable environmental, health and safety requirements of
Applicable Law;
(B) the Borrower and each of its Subsidiaries has
obtained all environmental, health and safety permits
necessary for its operation, and all such permits are in good
standing and the Borrower and each of its Subsidiaries is in
compliance in all material respects with all terms and
conditions of such permits;
(C) neither the Borrower nor any of its Subsidiaries
nor any of their respective present or past property or
operations are subject to any order from or agreement with
any public authority or private party respecting (x) any
environmental, health or safety requirements of Applicable
Law, (y) any Remedial Action, or (z) any liabilities and
costs arising from the Release or threatened Release of a
Contaminant into the environment;
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(D) none of the operations of the Borrower
or of any of its Subsidiaries is subject to any
judicial or administrative proceeding alleging a
violation of any environmental, health or safety
requirement of Applicable Law;
(E) none of the present nor past operations
of the Borrower or any of its Subsidiaries is the
subject of any investigation by any public authority
evaluating whether any Remedial Action is needed to
respond to a Release or threatened Release of a
Contaminant into the environment;
(F) neither the Borrower nor any of its
Subsidiaries has filed any notice under any
requirement of Applicable Law indicating past or
present treatment, storage or disposal of a
hazardous waste, as that term is defined under 40
CFR Part 261 or any state equivalent;
(G) neither the Borrower nor any of its
Subsidiaries has filed any notice under any
requirement of Applicable Law reporting a Release of
a Contaminant into the environment;
(H) Except in compliance in all material
respects with applicable Environmental Laws, during
the course of the Borrower's or any of its
Subsidiaries' ownership of or operations on the Real
Estate, there have been no (1) generation,
treatment, recycling, storage or disposal of
hazardous waste, as that term is defined under 40
CFR Part 261 or any state equivalent, (2) use of
underground storage tanks or surface impoundments,
(3) use of asbestos-containing materials, or (4) use
of polychlorinated biphenyls (PCB) used in hydraulic
oils, electrical transformers or other equipment;
(I) neither the Borrower nor any of its
Subsidiaries has entered into any negotiations or
agreements with any Person (including, without
limitation, any prior owner of any of the Real
Estate or other property of the Borrower or any of
its Subsidiaries) relating to any Remedial Action or
environmental related claim;
(J) neither the Borrower nor any of its
Subsidiaries has received any notice or claim to the
effect that it is or may be liable to any Person as
a result of the Release or threatened Release of a
Contaminant into the environment;
(K) neither the Borrower nor any of its
Subsidiaries has any material contingent liability
in connection with any Release or threatened Release
of any Contaminant into the environment;
(L) no Environmental Lien has attached to
any of the Real Estate or other property of the
Borrower or of any of its Subsidiaries;
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(M) the presence and condition of all
asbestos-containing material which is on or part of
the Real Estate (excluding any raw materials used in
the manufacture of products or products themselves)
do not violate in any material respect any currently
applicable requirement of Applicable Law; and
(N) neither the Borrower nor any of its
Subsidiaries manufactures, distributes or sells, and
has never manufactured, distributed or sold,
products which contain asbestos-containing material.
(iii) The Borrower has notified the Lender of the
receipt by it or by any of its Subsidiaries of any notice of
a material violation of any Environmental Laws and
occupational health and safety laws applicable to the
Borrower, any of its Subsidiaries or any of their respective
properties.
(i) Title to Properties. Except as set forth in SCHEDULE
7.1(I), the Borrower and each of its Subsidiaries has valid and legal
title to or leasehold interest in all personal property, Real Estate
owned and other assets used in its business.
(j) Liens. Except as set forth in SCHEDULE 7.1(J), none of
the properties and assets of the Borrower or any Subsidiary of the
Borrower is subject to any Lien, except Permitted Liens. Other than
the Financing Statements, no financing statement under the Uniform
Commercial Code of any State or other instrument evidencing a Lien
which names the Borrower or any Subsidiary of the Borrower as debtor
has been filed (and has not been terminated) in any State or other
jurisdiction, and neither the Borrower nor any Subsidiary of the
Borrower has signed any such financing statement or other instrument
or any security agreement authorizing any secured party thereunder to
file any such financing statement or instrument, except to perfect
those Liens listed on SCHEDULE 7.1(J). No financing statement under
the Uniform Commercial Code of any State or other instrument
evidencing a Lien which names the Seller as debtor and covers any of
the Acquired Assets has been filed (and has not been terminated) in
any State or other jurisdiction.
(k) Indebtedness and Guaranties. SCHEDULE 7.1(K) is a
complete and correct listing of all (i)Debt, and (ii)Guaranties of
each of the Borrower and each of its Subsidiaries. Each of the
Borrower and its Subsidiaries has performed and is in compliance with
all of the terms of such Debt and Guaranties and all instruments and
agreements relating thereto, and no default or event of default, or
event or condition which with notice or lapse of time or both would
constitute such a default or event of default, exists with respect to
any such Debt or Guaranty.
(l) Litigation. Except as set forth on SCHEDULE 7.1(L), there
are no actions, suits or proceedings pending (nor, to the knowledge of
the Borrower, are there any actions, suits or proceedings threatened,
or any reasonable basis therefor) against or in any other way relating
to or affecting the Borrower or such Subsidiaries or any of the
Acquired Assets or any of the Borrower's or any of its Subsidiaries'
other properties in any court or before any arbitrator of any kind or
before or by any governmental body, except actions, suits or
proceedings of the character normally incident to the kind of business
conducted by the
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Borrower or any of its Subsidiaries which, if adversely determined,
would not singly or in the aggregate have a Materially Adverse Effect
on the Borrower or such Subsidiary, and there are no strikes or
walkouts in progress, pending or contemplated relating to any labor
contracts to which the Borrower or any of its Subsidiaries is a party,
relating to any labor contracts being negotiated, or otherwise.
(m) Tax Returns and Payments. Except as set forth on SCHEDULE
7.1(M), all United States federal, state and local as well as foreign
national, provincial and local and other tax returns of the Borrower
and each of its Subsidiaries required by Applicable Law to be filed
have been duly filed, and all United States federal, state and local
and foreign national, provincial and local and other taxes,
assessments and other governmental charges or levies upon the Borrower
and each of its Subsidiaries and the Borrower's and any of its
Subsidiaries' property, income, profits and assets which are due and
payable have been paid, except any such nonpayment which is at the
time permitted under SECTION 10.6. The charges, accruals and reserves
on the books of the Borrower and each of its Subsidiaries in respect
of United States federal, state and local and foreign national,
provincial and local taxes for all fiscal years and portions thereof
since the organization of the Borrower are in the judgment of the
Borrower adequate, and the Borrower knows of no reason to anticipate
any additional assessments for any of such years which, singly or in
the aggregate, might have a Materially Adverse Effect on the Borrower.
(n) Burdensome Provisions. Neither the Borrower nor any of
its Subsidiaries is a party to any indenture, agreement, lease or
other instrument, or subject to any charter or corporate restriction,
Governmental Approval or Applicable Law compliance with the terms of
which might have a Materially Adverse Effect on the Borrower or any of
its Subsidiaries.
(o) Financial Statements.
(i) The Borrower has furnished to the Agent and the
Lenders copies of its audited balance sheet as of May 3,
1997, and the related audited statements of income and cash
flow for the fiscal year of the Borrower then ended, and its
interim unaudited balance sheet as of [July 31,] 1997, and
the related statement of income for the 13-week period then
ended, which financial statements were prepared in accordance
with GAAP and present fairly in all material respects the
financial position of the Borrower as at May 3, 1997, and
[July 31,] 1997 and the results of operations of the Borrower
for the fiscal year then ended and the 13-week period then
ended, respectively.
(ii) The Borrower has furnished to the Agent and the
Lenders copies of the Projections. The Projections have been
be prepared by the Borrower in light of the past operations
of the business of the Borrower and its Subsidiaries and
represent as of the respective dates thereof the good faith
opinion of the Borrower and its senior management concerning
the most probable course of business of the Borrower and its
Subsidiaries.
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(iii) Except as disclosed or reflected in the
financial statements described in CLAUSE (I) above, the
Borrower does not have any material liabilities, contingent
or otherwise, and there were no material unrealized or
anticipated losses of the Borrower.
(p) Adverse Change. Since the date of the last financial
statements of the Borrower delivered to the Agent pursuant to SECTION
7.1(O)(I), after giving effect to the transactions reflected in the
Pro Forma,
(i) no material adverse change has occurred in
the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrower,
and
(ii) no event has occurred or failed to occur which
has had, or may have, singly or in the aggregate, a
Materially Adverse Effect on the Borrower.
(q) ERISA.
(i) Neither the Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those
listed on SCHEDULE 7.1(Q).
(ii) No Benefit Plan has been terminated or
partially terminated, and no Multiemployer Plan is insolvent
or in reorganization, nor have any proceedings been
instituted to terminate any Benefit Plan or to reorganize any
Multiemployer Plan.
(iii) Neither the Borrower nor any Related Company
has withdrawn from any Benefit Plan or Multiemployer Plan,
nor has a condition occurred which if continued would result
in a withdrawal.
(iv) Neither the Borrower nor any Related Company
has incurred any withdrawal liability, including contingent
withdrawal liability, to any Multiemployer Plan pursuant to
Title IV of ERISA.
(v) Neither the Borrower nor any Related Company
has incurred any liability to the PBGC other than for
required insurance premiums which have been paid when due.
(vi) No Reportable Event has occurred with respect
to a Plan.
(vii) No Benefit Plan has an "accumulated funding
deficiency" (whether or not waived) as defined in Section 302
of ERISA or in Section 412 of the Internal Revenue Code.
(viii) Each Plan is in substantial compliance with
ERISA, and neither the Borrower nor any Related Company has
received any communication from a governmental agency
asserting that a Plan is not in compliance with ERISA.
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(ix) Each Plan which is intended to be a qualified
Plan has been determined by the IRS to be qualified under
Section 401(a) of the Internal Revenue Code as currently in
effect or will be submitted to the IRS for such determination
prior to the end of the remedial amendment period under
Section 401(b) of the Internal Revenue Code and the
regulations promulgated thereunder and neither the Borrower
nor any Related Company knows or has reason to know why each
such Plan should not continue to be so qualified, and each
trust related to such Plan that has been submitted to the IRS
for determination of exempt status has been determined to be
exempt from federal income tax under Section 501(a) of the
Internal Revenue Code or will be submitted to the IRS for a
determination of exempt status.
(x) Except as provided on SCHEDULE 7.1(Q), neither
the Borrower nor any Related Company maintains or contributes
to any employer welfare benefit plan within the meaning of
Section 3(l) of ERISA which provides benefits to employees
after termination of employment other than as required by
Section 601 of ERISA.
(xi) Schedule B to the most recent annual report
filed with the IRS with respect to each Benefit Plan and
furnished to the Lender is complete and accurate. Since the
date of each such Schedule B, there has been no adverse
change in funding status or financial condition of the
Benefit Plan relating to such Schedule B.
(xii) Neither the Borrower nor any Related Company
has failed to make a required installment under Subsection
(m) of Section 412 of the Internal Revenue Code or any other
payment required under Section 412 of the Internal Revenue
Code on or before the due date for such installment or other
payment.
(xiii) Neither the Borrower nor any Related Company
is required to provide security to a Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code due to a
Benefit Plan amendment that results in an increase in current
liability for the plan year.
(xiv) Neither the Borrower, nor any Related Company,
nor any other "party-in-interest" or "disqualified person"
has engaged in a nonexempt "prohibited transaction," as such
terms are defined in Section 4975 of the Internal Revenue
Code and Section 406 of ERISA, in connection with any Plan or
has taken or failed to take any action which would constitute
or result in a Termination Event.
(xv) Neither the Borrower nor any Related Company
has failed to comply with the health care continuation
coverage requirements of Section 4980B of the Internal
Revenue Code in respect of employees and former employees of
such Borrower or such Related Company and their dependents
and beneficiaries which alone or in the aggregate would
subject such Borrower or such Related Company to any material
liability.
(xvi) Neither the Borrower nor any Related Company
has (i) failed to make a required contribution or payment to
a Multiemployer Plan or (ii) made a complete
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or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan. Except as provided on SCHEDULE
7.1(Q), to the best knowledge of the Borrower after due
inquiry, neither the Borrower nor any Related Company shall
have any obligation to (A) make contributions to any
Multiemployer Plan on or after the Effective Date, or (B) pay
withdrawal liability to any Multiemployer Plan in an amount
in excess of a "de minimis amount" as such term is defined in
Section 4209 of ERISA.
(r) Absence of Defaults. Neither the Borrower nor any of its
Subsidiaries is in default under its articles or certificate of
incorporation or by-laws and no event has occurred, which has not been
remedied, cured or waived,
(i) which constitutes a Default or an Event of
Default, or
(ii) which constitutes, or which with the passage of
time or giving of notice or both would constitute, a default
or event of default by the Borrower or any of its
Subsidiaries under any material agreement (other than this
Agreement) or judgment, decree or order to which the Borrower
or any of its Subsidiaries is a party or by which the
Borrower, any of its Subsidiaries or any of the Borrower's or
any of its Subsidiaries' properties may be bound or which
would require the Borrower or any of its Subsidiaries to make
any payment under any thereof prior to the scheduled maturity
date therefor, except, in the case only of any such
agreement, for alleged defaults which are being contested in
good faith by appropriate proceedings and with respect to
which reserves in respect of the Borrower's or such
Subsidiary's reasonably anticipated liability have been
established on the books of the Borrower or such Subsidiary.
(s) Accuracy and Completeness of Information.
(i) All written information, reports and other
papers and data produced by or on behalf of the Borrower and
furnished to the Agent or any Lender were, at the time the
same were so furnished, complete and correct in all material
respects, to the extent necessary to give the recipient a
true and accurate knowledge of the subject matter. No fact is
known to the Borrower which has had, or may in the future
have (so far as the Borrower can foresee), a Materially
Adverse Effect upon the Borrower or any of its Subsidiaries
which has not been set forth in the financial statements or
disclosure delivered prior to the Effective Date, in each
case referred to in SECTION 7.1(O), or in such written
information, reports or other papers or data or otherwise
disclosed in writing to the Agent and the Lenders prior to
the Agreement Date. No document furnished or written
statement made to the Agent or any Lender by the Borrower in
connection with the negotiation, preparation or execution of
this Agreement or any of the Loan Documents contains or will
contain any untrue statement of a fact material to the
creditworthiness of the Borrower or omits or will omit to
state a material fact necessary in order to make the
statements contained therein not misleading.
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(ii) The Borrower has no reason to believe that any
document furnished or written statement made to the Agent or
any Lender by any Person other than the Borrower in
connection with the negotiation, preparation or execution of
this Agreement or any of the Loan Documents contained any
incorrect statement of a material fact or omitted to state a
material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
misleading.
(t) Solvency. In each case after giving effect to the
Indebtedness represented by the Loans outstanding and to be incurred,
the transactions contemplated by this Agreement, the Borrower and each
of its Subsidiaries is solvent, having assets of a fair salable value
which exceeds the amount required to pay its debts as they become
absolute and matured (including contingent, subordinated, unmatured
and unliquidated liabilities), and the Borrower and each of its
Subsidiaries is able to and anticipates that it will be able to meet
its debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged.
(u) Receivables.
(i) Status.
(A) Each Receivable reflected in the
computations included in any Borrowing Base
Certificate meets the criteria enumerated in CLAUSES
(A) through (V) of the definition of Eligible
Receivables, except as disclosed in such Borrowing
Base Certificate or as disclosed in a timely manner
in a subsequent Borrowing Base Certificate or
otherwise in writing to the Agent.
(B) The Borrower has no knowledge of any
fact or circumstance not disclosed in a Borrowing
Base Certificate or otherwise in writing which would
impair the validity or collectibility of any
Receivable of $100,000 or more or of Receivables
which (regardless of the individual amount thereof)
aggregate $500,000 or more.
(ii) Chief Executive Office. The chief executive
office of the Borrower and the books and records relating to
the Receivables are located at the address or addresses set
forth on SCHEDULE 7.1(U); the Borrower has not maintained its
chief executive office or books and records relating to any
Receivables at any other address at any time during the five
years immediately preceding the Agreement Date except as
disclosed on SCHEDULE 7.1(U).
(v) Inventory.
(i) Schedule of Inventory. All Inventory included
in any Schedule of Inventory or Borrowing Base Certificate
delivered to the Lender pursuant to SECTION 9.12 meets the
criteria enumerated in CLAUSES (A) through (J) of the
definition of Eligible Inventory, except as disclosed in such
Schedule of Inventory or Borrowing
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Base Certificate or in a subsequent Schedule of Inventory or
Borrowing Base Certificate, or as otherwise specifically
disclosed in writing to the Agent.
(ii) Condition. All Inventory is in good condition,
meets all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority
over such goods, their use or sale, and is currently either
usable or salable in the normal course of the Borrower's
business, except to the extent reserved against in the
financial statements referred to in SECTION 7.1(O) or
delivered pursuant to ARTICLE 11 or as disclosed on a
Schedule of Inventory delivered to the Agent pursuant to
SECTION 9.13(B).
(iii) Location. All Inventory is located on the
premises set forth on SCHEDULE 7.1(V) or is Inventory in
transit to one of such locations, except as otherwise
disclosed in writing to the Agent; the Borrower has not, in
the last year, located such Inventory at premises other than
those set forth on SCHEDULE 7.1(V).
(w) Equipment. All Equipment is in good order and repair in
all material respects and is located on the premises set forth on
SCHEDULE 7.1(W) and has been so located at all times during the last
year.
(x) Real Property. The Borrower owns no Real Estate and
leases no Real Estate other than that described on SCHEDULE 7.1(X) and
other than Real Estate acquired or leased after the Effective Date for
which the Borrower has complied with the requirements of SECTION 9.14.
(y) Corporate and Fictitious Names. Except as otherwise
disclosed on SCHEDULE 7.1(Y), during the five-year period preceding
the Agreement Date, neither the Borrower nor any predecessor thereof
has been known as or used any corporate or fictitious name other than
the corporate name of the Borrower on the Effective Date.
(z) Federal Reserve Regulations. Neither the Borrower nor any
of its Subsidiaries is engaged and none will engage, principally or as
one of its important activities, in the business of extending credit
for the purpose of "purchasing" or "carrying" any "margin stock" (as
each of the quoted terms is defined or used in Regulations G and U of
the Board of Governors of the Federal Reserve System). No part of the
proceeds of any of the Loans will be used for so purchasing or
carrying margin stock or, in any event, for any purpose which
violates, or which would be inconsistent with, the provisions of
Regulation G, T, U or X of such Board of Governors. If requested by
the Agent or any Lender, the Borrower will furnish to the Agent and
the Lenders a statement or statements in conformity with the
requirements of said Regulation G, T, U or X to the foregoing effect.
(aa) Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
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(ab) Employee Relations. The Borrower and each of its
Subsidiaries has a stable work force in place and is not, except as
set forth on SCHEDULE 7.1(BB), party to any collective bargaining
agreement nor has any labor union been recognized as the
representative of the Borrower's or any of its Subsidiaries'
employees, and the Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other labor disputes involving
the Borrower's or any of its Subsidiaries' employees.
(ac) Proprietary Rights. SCHEDULE 7.1(CC) sets forth a
correct and complete list of all of the Proprietary Rights. None of
the Proprietary Rights is subject to any licensing agreement or
similar arrangement except as set forth on SCHEDULE 7.1(CC) or as
entered into in the sale or distribution of the Borrower's Inventory
in the ordinary course of business. To the best of the Borrower's
knowledge, none of the Proprietary Rights infringes on or conflicts
with any other Person's property, and no other Person's property
infringes on or conflicts with the Proprietary Rights. The Proprietary
Rights described on SCHEDULE 7.1(CC) constitute all of the property of
such type necessary to the current and anticipated future conduct of
the Borrower's business.
(ad) Trade Names. All trade names or styles under which the
Borrower sells Inventory or Equipment or creates Receivables, or to
which instruments in payment of Receivables are made payable, are
listed on SCHEDULE 7.1(DD).
SECTION 7.2. Survival of Representations and Warranties, Etc.
All representations and warranties set forth in this ARTICLE 7 and all
statements contained in any certificate, financial statement, or other
instrument, delivered by or on behalf of the Borrower pursuant to or in
connection with this Agreement or any of the Loan Documents (including, but not
limited to, any such representation, warranty or statement made in or in
connection with any amendment thereto) shall constitute representations and
warranties made under this Agreement. All representations and warranties made
under this Agreement shall be made or deemed to be made at and as of the
Agreement Date, at and as of the Effective Date and at and as of the date of
each Loan, except that representations and warranties which, by their terms are
applicable only to one such date shall be deemed to be made only at and as of
such date. All representations and warranties made or deemed to be made under
this Agreement shall survive and not be waived by the execution and delivery of
this Agreement, any investigation made by or on behalf of the Lender or any
borrowing hereunder.
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ARTICLE 8
SECURITY INTEREST
SECTION 8.1. Security Interest.
(a) To secure the payment, observance and performance of the
Secured Obligations, the Borrower hereby mortgages, pledges and
assigns all of the Collateral to the Agent, for the benefit of itself
as Agent and for the pro rata benefit of the Lenders (in proportion to
each Lender's ownership of all Secured Obligations from time to time),
and grants to the Agent, for the benefit of itself as Agent and for
the pro rata benefit of the Lenders (also in such proportion), a
continuing security interest in, and a continuing Lien upon, all of
the Collateral; PROVIDED, that no part of the Revolving Credit Loans
shall be secured by Real Estate or fixtures located in Alabama.
(b) As additional security for all of the Secured
Obligations, the Borrower grants to the Agent, for the benefit of
itself as Agent and the Lenders, a security interest in, and assigns
to the Agent, for the benefit of itself as Agent and the Lenders, all
of the Borrower's right, title and interest in and to, any deposits or
other sums at any time credited by or due from each Lender and each
Affiliate of a Lender to the Borrower, with the same rights therein as
if the deposits or other sums were credited by or due from such
Lender. The Borrower hereby authorizes each Lender and each Affiliate
of such Lender to pay or deliver to the Agent, for the account of the
Lenders, without any necessity on the Agent's or any Lender's part to
resort to other security or sources of reimbursement for the Secured
Obligations, at any time during the continuation of any Event of
Default or in the event that the Agent, on behalf of the Lenders,
should make demand for payment hereunder and without further notice to
the Borrower (such notice being expressly waived), any of the
aforesaid deposits (general or special, time or demand, provisional or
final) or other sums for application to any Secured Obligation,
irrespective of whether any demand has been made or whether such
Secured Obligation is mature, and the rights given the Agent, the
Lenders, their Affiliates hereunder are cumulative with such Person's
other rights and remedies, including other rights of set-off. The
Agent will promptly notify the Borrower of its receipt of any such
funds for application to the Secured Obligations, but failure to do so
will not affect the validity or enforceability thereof. The Agent may
give notice of the above grant of a security interest in and
assignment of the aforesaid deposits and other sums, and
authorization, to, and make any suitable arrangements with, any
Lender, any such Affiliate of any Lender or participant for
effectuation thereof, and the Borrower hereby irrevocably appoints
Agent as its attorney to collect any and all such deposits or other
sums to the extent any such payment is not made to the Agent or any
Lender by such Lender or Affiliate. Notwithstanding the foregoing,
each of the Agent and the Lenders agrees with each other that it shall
not, without the express consent of the Required Lenders, and that it
shall (to the extent that it is lawfully entitled to do so) upon the
request of the Required Lenders, exercise its setoff rights hereunder
against any accounts of the Borrower now or hereafter maintained with
the Agent, such Lender, or any Affiliate of any of them. If any party
(or its Affiliate) exercises the right of setoff provided for
hereunder, such party shall be obligated to share any such setoff in
the manner and to the extent required by SECTION 16.22.
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SECTION 8.2. Continued Priority of Security Interest.
(a) The Security Interest granted by the Borrower shall at
all times be valid, perfected and enforceable against the Borrower and
all third parties in accordance with the terms of this Agreement, as
security for the Secured Obligations, and the Collateral shall not at
any time be subject to any Liens that are prior to, on a parity with
or junior to the Security Interest, other than Permitted Liens.
(b) The Borrower shall, at its sole cost and expense, take
all action that may be necessary or desirable, or that the Agent may
reasonably request, so as at all times to maintain the validity,
perfection, enforceability and rank of the Security Interest in the
Collateral in conformity with the requirements of SECTION 8.2(A), or
to enable the Agent and the Lenders to exercise or enforce their
rights hereunder, including, but not limited to:
(i) paying all taxes, assessments and other claims
lawfully levied or assessed on any of the Collateral, except
to the extent that such taxes, assessments and other claims
constitute Permitted Liens,
(ii) obtaining, after the Agreement Date, landlords'
and mortgagees' releases, subordinations or waivers, and
using all reasonable efforts to obtain mechanics' releases,
subordinations or waivers,
(iii) delivering to the Agent, for the benefit of
the Lenders, endorsed or accompanied by such instruments of
assignment as the Agent may specify, and stamping or marking,
in such manner as the Agent may specify, any and all chattel
paper, instruments, letters and advices of guaranty and
documents evidencing or forming a part of the Collateral, and
(iv) executing and delivering financing statements,
pledges, designations, hypothecations, notices and
assignments in each case in form and substance satisfactory
to the Agent relating to the creation, validity, perfection,
maintenance or continuation of the Security Interest under
the Uniform Commercial Code or other Applicable Law.
(c) The Agent is hereby authorized to file one or more
financing or continuation statements or amendments thereto without the
signature of or in the name of the Borrower for any purpose described
in SECTION 8.2(B). The Agent will give the Borrower notice of the
filing of any such statements or amendments, which notice shall
specify the locations where such statements or amendments were filed.
A carbon, photographic, xerographic or other reproduction of this
Agreement or of any of the Security Documents or of any financing
statement filed in connection with this Agreement is sufficient as a
financing statement.
(d) The Borrower shall xxxx its books and records as directed
by the Agent and as may be necessary or appropriate to evidence,
protect and perfect the Security Interest and shall cause its
financial statements to reflect the Security Interest.
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ARTICLE 9
COLLATERAL COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the Required Lenders
shall otherwise consent in the manner provided in SECTION 16.11:
SECTION 9.1. Collection of Receivables.
(a) At the request of the Agent, the Borrower will cause all
monies, checks, notes, drafts and other payments relating to or
constituting proceeds of trade accounts receivable to be forwarded to
a Lockbox for deposit in an Agency Account in accordance with the
procedures set out in the corresponding Agency Account Agreement. The
Borrower will promptly cause all monies, checks, notes, drafts and
other payments relating to or constituting proceeds of other
Receivables, of any other Collateral and of any trade accounts
receivable that are not forwarded to a Lockbox, to be transferred to
or deposited in an Agency Account. In particular, the Borrower will:
(i) advise each Account Debtor on trade accounts
receivable to address all remittances with respect to amounts
payable on account thereof to a specified Lockbox,
(ii) advise each other Account Debtor that makes
payment to the Borrower by wire transfer, automated
clearinghouse transfer or similar means to make payment
directly to an Agency Account, and
(iii) stamp all invoices relating to trade accounts
receivable with a legend satisfactory to the Agent indicating
that payment is to be made to the Borrower via a specified
Lockbox.
(b) The Borrower and the Agent shall cause all collected
balances, once they exceed $50,000 in the aggregate in all Agency
Accounts, to be transmitted by wire transfer, depository transfer
check or other means in accordance with the procedures set forth in
the corresponding Agency Account Agreement, to the Agent at the
Agent's Office:
(i) for application, on account of the Secured
Obligations, as provided in SECTIONS 2.3(C), 13.2, and 13.3,
such credits to be entered as of the Business Day they are
received if they are received prior to 1:30 p.m. (Atlanta
time) and to be conditioned upon final payment in cash or
solvent credits of the items giving rise to them, and
(ii) with respect to the balance, so long as no
Default or Event of Default has occurred and is continuing,
for transfer by wire transfer or depository transfer check to
a Controlled Disbursement Account.
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(c) Any monies, checks, notes, drafts or other payments
referred to in SUBSECTION (A) of this SECTION 9.1 which,
notwithstanding the terms of such subsection, are received by or on
behalf of the Borrower will be held in trust for the Agent and will be
delivered to the Agent or a Clearing Bank, as promptly as possible, in
the exact form received, together with any necessary endorsements for
application by the Agent directly to the Secured Obligations or, if
applicable, for deposit in the Agency Account maintained with a
Clearing Bank and processing in accordance with the terms of the
corresponding Agency Account Agreement.
SECTION 9.2. Verification and Notification. The Agent
shall have the right at any time and from time to time,
(a) in the name of the Agent or in the name of the Borrower,
to verify the validity, amount or any other matter relating to any
Receivables by mail, telephone, telegraph or otherwise,
(b) to review, audit and make extracts from all records and
files related to any of the Receivables, and
(c) to notify the Account Debtors or obligors under any
Receivables of the assignment of such Receivables to the Agent, for
the benefit of the Lenders, and to direct such Account Debtor or
obligors to make payment of all amounts due or to become due
thereunder directly to the Agent, for the account of the Lenders, and,
upon such notification and at the expense of the Borrower, to enforce
collection of any such Receivables and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same
extent as the Borrower might have done.
SECTION 9.3. Disputes, Returns and Adjustments.
(a) In the event any amounts due and owing under any single
Receivable for an amount in excess of $250,000 are in dispute between
the Account Debtor and the Borrower, or the aggregate amount in
dispute for all Receivables exceeds $500,000, the Borrower shall
provide the Agent with prompt written notice thereof. Discounts
offered in the ordinary cause of business and advertising allowances
shall be excluded from the calculation of the disputed amount under
this SECTION 9.3(A).
(b) The Borrower shall notify the Agent promptly of all
returns and credits in excess of $250,000 in respect of any
Receivable, and in excess of $500,000 in respect of all Receivables in
the aggregate for any month, which notice shall specify the
Receivables affected. Discounts offered in the ordinary course of
business and advertising allowances shall be excluded from the
calculation of the credits under this SECTION 9.3(B).
(c) The Borrower may, in the ordinary course of business
unless a Default or an Event of Default has occurred and is
continuing, grant any extension of time for payment of any Receivable
or compromise, compound or settle the same for less than the full
amount thereof, or release wholly or partly any Person liable for the
payment thereof, or allow any credit or discount whatsoever therein;
PROVIDED that (i) no such action results in the
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reduction of more than $250,000 in the amount payable with respect to
any Receivable or of more than $1 million with respect to all
Receivables in any fiscal year of the Borrower (in each case,
excluding the allowance of credits or discounts generally available to
Account Debtors in the ordinary course of the Borrower's business and
appropriate adjustments to the accounts of Account Debtors in the
ordinary course of business), and (ii)the Agent is promptly notified
of the amount of such adjustments and the Receivable(s) affected
thereby.
SECTION 9.4. Invoices.
(a) The Borrower will not use any invoices other than
invoices in the form delivered to the Agent prior to the Agreement
Date without giving the Agent 30 days prior notice of the intended use
of a different form of invoice together with a copy of such different
form.
(b) Upon the request of the Agent, the Borrower shall deliver
to the Agent, at the Borrower's expense, copies of customers' invoices
or the equivalent, original shipping and delivery receipts or other
proof of delivery, customers' statements, customer address lists, the
original copy of all documents, including, without limitation,
repayment histories and present status reports, relating to
Receivables and such other documents and information relating to the
Receivables as the Agent shall specify.
SECTION 9.5. Delivery of Instruments. In the event any
Receivable is at any time evidenced by a promissory note, trade acceptance or
any other instrument for the payment of money, the Borrower will immediately
thereafter deliver such instrument to the Agent, appropriately endorsed to the
Agent, for the benefit of the Lenders.
SECTION 9.6. Sales of Inventory. All sales of Inventory
will be made in compliance with all requirements of Applicable Law.
SECTION 9.7. Ownership and Defense of Title.
(a) Except for Permitted Liens, the Borrower shall at all
times be the sole owner or lessee of each and every item of Collateral
and shall not create any lien on, or sell, lease, exchange, assign,
transfer, pledge, hypothecate, grant a security interest or security
title in or otherwise dispose of, any of the Collateral or any
interest therein, except for sales of Inventory in the ordinary course
of business, for cash or on open account or on terms of payment
ordinarily extended to its customers, and except for dispositions that
are otherwise expressly permitted under this Agreement. The inclusion
of "proceeds" of the Collateral under the Security Interest shall not
be deemed a consent by the Agent or the Lenders to any other sale or
other disposition of any part or all of the Collateral.
(b) The Borrower shall defend its title or leasehold interest
in and to, and the Security Interest in, the Collateral against the
claims and demands of all Persons.
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SECTION 9.8. Insurance.
(a) The Borrower shall at all times maintain insurance on the
Inventory and Equipment against loss or damage by fire, theft
(excluding theft by employees), burglary, pilferage, loss in transit
and such other hazards as the Agent or Required Lenders shall
reasonably specify, in amounts not to exceed those obtainable at
commercially reasonable rates and under policies issued by insurers
acceptable to the Agent in the exercise of its reasonable judgment.
All premiums on such insurance shall be paid by the Borrower and
copies of the policies delivered to the Agent. The Borrower will not
use or permit the Inventory or Equipment to be used in violation of
Applicable Law or in any manner which might render inapplicable any
insurance coverage.
(b) All insurance policies required under SECTION 9.8(A)
shall name the Agent, for the benefit of the Lenders, as an additional
insured and shall contain loss payable clauses in the form submitted
to the Borrower by the Agent, or otherwise in form and substance
satisfactory to the Required Lenders, naming the Agent, for the
benefit of the Lenders, as loss payee, as its interests may appear,
and providing that
(i) all proceeds thereunder shall be payable to the
Agent, for the benefit of the Lenders,
(ii) no such insurance shall be affected by any act
or neglect of the insurer or owner of the property described
in such policy, and
(iii) such policy and loss payable clauses may be
canceled, amended or terminated only upon at least 10 days
prior written notice given to the Agent.
(c) Any proceeds of insurance referred to in this SECTION 9.8
which are paid to the Agent, for the pro rata benefit of the Lenders,
shall be, at the option of the Required Lenders in their sole
discretion, either (i) applied to replace the damaged or destroyed
property, or (ii)applied to the payment or prepayment of the Secured
Obligations.
SECTION 9.9. Location of Offices and Collateral.
(a) The Borrower will not change the location of its chief
executive office or the place where it keeps its books and records
relating to the Collateral or change its name, its identity or
corporate structure without giving the Agent and each Lender at least
60 days prior written notice thereof.
(b) All Inventory, other than Inventory in transit to any
such location, will at all times be kept by the Borrower at the
locations set forth in SCHEDULE 7.1(V), and shall not, without the
prior written consent of the Agent, be removed therefrom except
pursuant to sales of Inventory permitted under SECTION 9.7(A).
(c) If any Inventory is in the possession or control of any
of the Borrower's agents or processors, the Borrower shall notify such
agents or processors of the Security
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Interest (and shall promptly provide copies of any such notice to the
Agent and the Lenders) and, upon the occurrence of an Event of
Default, shall instruct them (and cause them to acknowledge such
instruction) to hold all such Inventory for the account of the account
of the Lenders, subject to the instructions of the Agent.
SECTION 9.10. Records Relating to Collateral.
(a) The Borrower will at all times
(i) keep complete and accurate records of Inventory
on a basis consistent with past practices of the Borrower so
as to permit comparison of Inventory records relating to
different time periods, itemizing and describing the kind,
type and quantity of Inventory and the Borrower's cost
therefor and a current price list for such Inventory, and
(ii) keep complete and accurate records of all other
Collateral.
(b) The Borrower will prepare a physical listing of all
Inventory, wherever located, at least annually.
SECTION 9.11. Inspection. The Agent and each Lender (by any
of their officers, employees or agents) shall have the right, to the extent
that the exercise of such right shall be within the control of the Borrower, at
any time or times to
(a) visit the properties of the Borrower and its
Subsidiaries, inspect the Collateral and the other assets of the
Borrower and its Subsidiaries and inspect and make extracts from the
books and records of the Borrower and its Subsidiaries, including but
not limited to, management letters prepared by independent accounts,
all during customary business hours at such premises;
(b) discuss the Borrower's and its Subsidiaries' business,
assets, liabilities, financial condition, results of operations and
business prospects, insofar as the same are reasonably related to the
rights of the Agent or the Lenders hereunder or under any of the Loan
Documents, with the Borrower's and its Subsidiaries' (i) principal
officers, (ii) independent accountants, and (iii) any other Person
(except that any such discussion with any third parties shall be
conducted only in accordance with the Agent's or such Lender's
standard operating procedures relating to the maintenance of the
confidentiality of confidential information of borrowers);
(c) verify the amount, quantity, value and condition of, or
any other matter relating to, any of the Collateral (other than
Receivables) and in this connection to review, audit and make extracts
from all records and files related to any of the Collateral.
The Borrower will deliver to the Agent or any Lender, upon its request, any
instrument necessary for it to obtain records from any service bureau
maintaining records on behalf of the Borrower.
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SECTION 9.12. Information and Reports.
(a) Schedule of Receivables. The Borrower shall deliver to
the Agent and to each Lender on or before the Effective Date and on
the fifth Business Day of each month thereafter, a Schedule of
Receivables which
(i) shall be as of the last Business Day of the
immediately preceding week or month, as the case may be,
(ii) shall be reconciled to the Borrowing Base
Certificate as of such last Business Day, and
(iii) shall set forth a line item summary aging,
and, on a monthly basis, a detailed aged trial balance by
invoice of all its then-existing Receivables, specifying the
name, address and balance due for each Account Debtor
obligated on a Receivable so listed.
(b) Schedule of Inventory. The Borrower shall deliver to the
Agent and to each Lender on or before the Effective Date and not later
than the fifth Business Day of each calendar month thereafter a
Schedule of Inventory as of the last Business Day of the immediately
preceding month of the Borrower, itemizing and describing the kind,
type and quantity of Inventory, the Borrower's cost thereof and the
location thereof.
(c) Borrowing Base Certificate. The Borrower shall deliver to
the Agent and to each Lender on the fifth Business Day of each month
after the Effective Date a Borrowing Base Certificate prepared as of
the close of business on the last day of the preceding month.
(d) Notice of Diminution of Value. The Borrower shall give
prompt notice to the Agent and to each Lender of any matter or event
which has resulted in, or may result in, the diminution in excess of
$1 million in the value of any of its Collateral, except for any such
diminution in the value of any Receivables or Inventory in the
ordinary course of business which has been appropriately reserved
against, as reflected in financial statements previously delivered to
the Agent and the Lenders pursuant to ARTICLE 11.
(e) Additional Information. The Agent may in its discretion
from time to time request that the Borrower deliver to the Agent and
to each Lender the schedules, certificates described in SECTIONS
9.12(A), (B) and (C) more or less often and on different schedules
than specified in such Sections and the Borrower will comply with such
requests. The Borrower will also furnish to the Agent and each Lender
such other information with respect to the Collateral as the Agent or
such Lender may from time to time reasonably request.
SECTION 9.13. Power of Attorney. The Borrower hereby appoints
the Agent as its attorney, with power
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(a) to endorse the name of the Borrower on any checks, notes,
acceptances, money orders, drafts or other forms of payment or
security that may come into the Agent's or any Lender's possession,
and
(b) to sign the name of the Borrower on any invoice or xxxx
of lading relating to any Receivable, Inventory or other Collateral,
on any drafts against customers related to letters of credit, on
schedules and assignments of Receivables furnished to the Agent or any
Lender by the Borrower, on notices of assignment, financing statements
and other public records relating to the perfection or priority of the
Security Interest, verifications of account and notices to or from
customers.
SECTION 9.14. Additional Real Estate and Leases.
(a) Promptly upon the Borrower's acquisition of any interest
(including a leasehold interest) in any Real Estate, the Borrower
shall deliver to the Agent, for the benefit of itself as Agent and the
Lenders, an executed Mortgage in form and substance satisfactory to
the Agent, conveying to the Agent, for the benefit of itself and the
Lenders, a first priority Lien on such Real Estate, subject only to
such prior Liens as the Agent shall consent to in writing. If
requested by the Agent, the Borrower shall also deliver to the Agent
at Borrower's expense a mortgagee title insurance policy in favor of
the Agent and the Lenders insuring such Mortgage to create and convey
such Lien, subject only to such exceptions consented to by the Agent
and shall deliver to the Agent the other items set forth in SECTION
6.1(F)(XIII), (XIV), (XV), (XIX), (XX) and (XXI) with respect to such
Real Estate, all in form and substance satisfactory to the Agent.
(b) Promptly upon the Borrower's entry into any lease of Real
Estate (other than a lease conveying an interest in Real Estate, which
shall be subject to the provisions of CLAUSE (A) above), the Borrower
shall collaterally assign to the Agent, for the benefit of itself and
the Lenders, the Borrower's interest in such lease, in form and
substance satisfactory to the Agent. The Borrower shall also deliver
to the Agent an executed landlord's waiver and consent with respect to
such lease in form and substance satisfactory to the Agent.
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SECTION 9.15. Assignment of Claims Act. Upon the request of
the Agent, the Borrower shall execute any documents or instruments and shall
take such steps or actions reasonably required by the Agent so that all monies
due or to become due under any contract with the United States of America, the
District of Columbia or any state, county, municipality or other domestic or
foreign governmental entity, or any department, agency or instrumentality
thereof, will be assigned to the Agent, for the benefit of itself and the
Lenders, and notice given thereof in accordance with the requirements of the
Assignment of Claims Act of 1940, as amended, or any other laws, rules or
regulations relating to the assignment of any such contract and monies due to
or to become due.
SECTION 9.16. 1997 Projects. Promptly following the Project
Completion Date, at the request of the Agent, the Borrower will cause "as
built" surveys reflecting completion of the 1997 Projects, in a form that
satisfies applicable state requirements, to be delivered to the Agent and, with
respect to the Arizona facility, shall furnish a report from a qualified
engineering firm or other qualified consultant acceptable to the Agent with
respect to an investigation and audit of the Arizona Facility and the Real
Estate on which it is located, which shall be based on a thorough review of
past and present uses, occupants, ownership and tenancy of the property and/or
adjacent properties and/or upgradient properties regarding, (a) subsurface
ground water hazards, soils and/or test boring reports; (b)contact with local,
state or federal agencies regarding known or suspected hazardous material
contamination of the property or other properties in the area; (c) review of
aerial photographs; (d) visual site inspection noting unregulated fills,
storage tanks or areas, ground discoloration or soil odors; (e) other
investigative methods deemed necessary by the consultant or the Agent to enable
the consultant to report that there is no apparent or likely contamination of
the property or another property in the area; and (f) if deemed reasonably
necessary to further investigate suspected or likely contamination,
supplemental environmental reports prepared by qualified consultants of the
analysis of core drilling or ground water samples from the property, showing no
contamination by hazardous materials.
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ARTICLE 10
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the Required Lenders
shall otherwise consent in the manner provided for in SECTION 16.11, the
Borrower will, and will cause each of its Subsidiaries to:
SECTION 10.1. Preservation of Corporate Existence and Similar
Matters. Preserve and maintain its corporate existence, rights, franchises,
licenses and privileges in the jurisdiction of its incorporation and qualify
and remain qualified as a foreign corporation and authorized to do business in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization.
SECTION 10.2. Compliance with Applicable Law. Comply with all
Applicable Law relating to the Borrower or such Subsidiary except to the extent
being contested in good faith by appropriate proceedings and for which reserves
in respect of the Borrower's or such Subsidiary's reasonably anticipated
liability therefor have been appropriately established.
SECTION 10.3. Maintenance of Property. In addition to, and
not in derogation of, the requirements of SECTION 9.7 and of the Security
Documents,
(a) protect and preserve all properties material to its
business, including copyrights, patents, trade names and trademarks,
and maintain in good repair, working order and condition in all
material respects, with reasonable allowance for wear and tear, all
tangible properties, and
(b) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such
properties necessary for the conduct of its business, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION 10.4. Conduct of Business. At all times carry on its
business in an efficient manner and engage only the business described in
SECTION 7.1(G).
SECTION 10.5. Insurance. Maintain, in addition to the
coverage required by SECTION 9.8 and the Security Documents, insurance with
responsible insurance companies against such risks and in such amounts as is
customarily maintained by similar businesses or as may be required by
Applicable Law, and from time to time deliver to the Agent or any Lender upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates
of the expiration thereof and the properties and risks covered thereby.
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SECTION 10.6. Payment of Taxes and Claims. Pay or discharge
when due
(a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any properties
belonging to it, except that real property AD VALOREM taxes shall be
deemed to have been so paid or discharged if the same are paid before
they become delinquent, and
(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals
which, if unpaid, might become a Lien on any properties of the
Borrower;
except that this SECTION 10.6 shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and for which reserves in respect of the
reasonably anticipated liability therefor have been appropriately established.
SECTION 10.7. Accounting Methods and Financial Records.
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete), as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP.
SECTION 10.8. Use of Proceeds.
(a) Use the proceeds of
(i) the initial Revolving Credit Loan and the Term
Loans made on the Effective Date to pay amounts indicated on
SCHEDULE 10.8 to the Persons indicated thereon,
(ii) all Interim Construction Loans only to pay or
reimburse the payment of costs of construction and
acquisition of new Equipment related to the 1997 Birmingham
Warehouse, the 1997 Birmingham Tubular and the Arizona
Facilities, and
(iii) all subsequent Loans only for working capital
and general business purposes, and
(b) not use any part of such proceeds to purchase or, to
carry or reduce or retire or refinance any credit incurred to purchase
or carry, any margin stock (within the meaning of Regulation G or U of
the Board of Governors of the Federal Reserve System) or, in any
event, for any purpose which would involve a violation of such
Regulation G or U or of Regulation T or X of such Board of Governors,
or for any purpose prohibited by law or by the terms and conditions of
this Agreement.
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SECTION 10.9. Hazardous Waste and Substances; Environmental
Requirements.
(a) In addition to, and not in derogation of, the
requirements of SECTION 10.2 and of the Security Documents, comply
with all Environmental Laws and all Applicable Laws relating to
occupational health and safety (except for instances of noncompliance
that are being contested in good faith by appropriate proceedings if
reserves in respect of the Borrower's or such Subsidiary's reasonably
anticipated liability therefor have been appropriately established),
promptly notify the Agent of its receipt of any notice of a violation
of any such Environmental Laws or other such Applicable Laws and
indemnify and hold the Agent and the Lenders harmless from all loss,
cost, damage, liability, claim and expense incurred by or imposed upon
the Agent or any Lender on account of the Borrower's failure to
perform its obligations under this SECTION 10.9.
(b) Whenever the Borrower gives notice to the Agent pursuant
to this SECTION 10.9 with respect to a matter that reasonably could be
expected to result in liability to the Borrower in excess of $500,000
in the aggregate, the Borrower shall, at the Agent's request and the
Borrower's expense (i) cause an independent environmental engineer
acceptable to the Agent to conduct an assessment, including tests
where necessary, of the site where the noncompliance or alleged
noncompliance with Environmental Laws has occurred and prepare and
deliver to the Agent a report setting forth the results of such
assessment, a proposed plan to bring the Borrower into compliance with
such Environmental Laws (if such assessment indicates noncompliance)
and an estimate of the costs thereof, and (ii) provide to the Agent a
supplemental report of such engineer whenever the scope of the
noncompliance, or the response thereto or the estimated costs thereof,
shall materially adversely change.
SECTION 10.10. Warranty Reserves. Maintain adequate Warranty
Reserves.
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ARTICLE 11
INFORMATION
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the Required Lenders
shall otherwise consent in the manner set forth in SECTION 16.11, the Borrower
will furnish to the Agent and to each Lender at the offices then designated for
such notices pursuant to SECTION 16.1:
SECTION 11.1. Financial Statements.
(a) Audited Year-End Statements. As soon as available, but in
any event within 120 days after the end of each fiscal year of the
Borrower, copies of the consolidating and Consolidated balance sheets
of the Borrower and its Consolidated Subsidiaries as at the end of
such fiscal year and the related statements of earnings, shareholders'
equity and statement of cash flows for such fiscal year, in each case
setting forth in comparative form the figures for the previous fiscal
year of the Borrower, reported on, as to such Consolidated statements,
without qualification as to the scope of the audit or the status of
the Borrower as a "going concern", by independent certified public
accountants of nationally recognized standing; and
(b) Monthly Financial Statements. As soon as available after
the end of each month, but in any event within 30 days after the end
of each month, copies of the unaudited consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at the end of such
month and the related unaudited consolidated statements of earnings
and cash flows for the Borrower and its Consolidated Subsidiaries for
such month and for the portion of the fiscal year of the Borrower
through such month, certified by a Financial Officer of the Borrower
as presenting fairly the financial condition and results of operations
of the Borrower (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of notes and for the effect of normal
year-end audit adjustments) applied consistently throughout the periods
reflected therein.
SECTION 11.2. Accountants' Certificate. Together with the
financial statements referred to in SECTION 11.1(A), the Borrower shall deliver
a certificate of such accountants addressed to the Agent and each Lender
(a) stating that in making the examination necessary for the
certification of such financial statements, nothing has come to their
attention to lead them to believe that any Default or Event of Default
exists and, in particular, they have no knowledge of any Default or
Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature, and
(b) having attached the calculations, prepared by the
Borrower and reviewed by such accountants, required to establish
whether or not the Borrower is in compliance with
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the covenants contained in SECTIONS 12.1, 12.2, 12.5, 12.6 12.10 AND
12.11, as at the date of such financial statements.
SECTION 11.3. Officer's Certificate. At the time that the
Borrower furnishes the financial statements pursuant to SECTION 11.1(B) for any
month that is the last month of a fiscal quarter of the Borrower, the Borrower
shall also furnish a certificate of its President or a Financial Officer
substantially in the form of EXHIBIT F.
(a) setting forth as at the end of such fiscal quarter or
fiscal year, as the case may be, the calculations required to
establish whether or not the Borrower was in compliance with the
requirements of SECTIONS 12.1, 12.2, 12.5, 12.6, 12.10 AND 12.11, as
at the end of each respective period,
(b) stating that the information on the schedules to this
Agreement are complete and accurate as of the date of such certificate
or, if such is not the case, attaching to such certificate updated
schedules, and
(c) stating that, based on a reasonably diligent examination,
no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by the
Borrower with respect to such Default or Event of Default.
SECTION 11.4. Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower or its Board of Directors by its
independent public accountants, including, without limitation, any
management report.
(b) As soon as practicable, copies of all financial
statements and reports that the Borrower shall send to its
shareholders generally and of all registration statements and all
regular or periodic reports which the Borrower shall file with the
Securities and Exchange Commission or any successor commission.
(c) From time to time and as soon as reasonably practicable
following each request, such forecasts, data, certificates, reports,
statements, opinions of counsel, documents or further information
regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrower or any of
its Subsidiaries as the Agent or any Lender may reasonably request and
that the Borrower has or (except in the case of legal opinions
relating to the perfection or priority of the Security Interest)
without unreasonable expense can obtain; PROVIDED, HOWEVER, that the
Lenders shall, to the extent reasonably practicable, coordinate
examinations of the Borrower's records by their respective internal
auditors. The rights of the Agent and the Lenders under this SECTION
11.4 are in addition to and not in derogation of their rights under
any other provision of this Agreement or of any other Loan Document.
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(d) If requested by the Agent or any Lender, the Borrower
will furnish to the Agent and the Lenders statements in conformity
with the requirements of Federal Reserve Form G-3 or U-1 referred to
in Regulation G and U, respectively, of the Board of Governors of the
Federal Reserve System.
SECTION 11.5. Notice of Litigation and Other Matters. Prompt
notice of:
(a) the commencement, to the extent the Borrower is aware of
the same, of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings
in any court or before any arbitrator against or in any other way
relating to or affecting the Borrower, any of its Subsidiaries or any
of the Borrower's or any of its Subsidiaries' properties, assets or
businesses, which might, singly or in the aggregate, result in the
occurrence of a Default or an Event of Default, or have a Materially
Adverse Effect on the Borrower or any of its Subsidiaries,
(b) any amendment of the articles of incorporation or by-laws
of the Borrower or any of its Subsidiaries,
(c) any change in the business, assets, liabilities,
financial condition, results of operations or business prospects of
the Borrower or any of its Subsidiaries which has had or may have,
singly or in the aggregate, a Materially Adverse Effect on the
Borrower or any of its Subsidiaries and any change in the executive
officers of the Borrower, and
(d) any Default or Event of Default or any event which
constitutes or which with the passage of time or giving of notice or
both would constitute a default or event of default by the Borrower or
any of its Subsidiaries under any material agreement (other than this
Agreement) to which the Borrower or any of its Subsidiaries is a party
or by which the Borrower, any of its Subsidiaries or any of the
Borrower's or any of its Subsidiaries' properties may be bound.
SECTION 11.6. ERISA. As soon as possible and in any event
within 30 days after the Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Plan has occurred
or will occur, or
(b) the aggregate present value of the Unfunded Vested
Accrued Benefits under all Plans is equal to an amount in excess of
$0.00, or
(c) the Borrower or any of its Subsidiaries is in "default"
(as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan required by reason of the Borrower's or such
Subsidiary's complete or partial withdrawal (as described in Section
4203 or 4205 of ERISA) from such Multiemployer Plan,
a certificate of the President or a Financial Officer of the Borrower setting
forth the details of such event and the action which is proposed to be taken
with respect thereto, together with any notice
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or filing which may be required by the PBGC or other agency of the United
States government with respect to such event.
SECTION 11.7. Accuracy of Information. All written
information, reports, statements and other papers and data furnished to the
Agent or any Lender, whether pursuant to this ARTICLE 11 or any other provision
of this Agreement or of any other Loan Document, shall be, at the time the same
is so furnished, complete and correct in all material respects to the extent
necessary to give the Agent and the Lenders true and accurate knowledge of the
subject matter.
SECTION 11.8. Revisions or Updates to Schedules. Should any
of the information or disclosures provided on any of the Schedules originally
attached hereto become outdated or incorrect in any material respect, the
Borrower shall deliver to the Agent and the Lenders as part of the officer's
certificate required pursuant to SECTION 11.3(B) such revisions or updates to
such Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s), PROVIDED that no such revisions or updates to any Schedule(s)
shall be deemed to have amended, modified or superseded such Schedule(s) as
originally attached hereto, or to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule(s), unless and until the Required Lenders in their sole and absolute
discretion, shall have accepted in writing such revisions or updates to such
Schedule(s).
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ARTICLE 12
NEGATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the Required Lenders
shall otherwise consent in the manner set forth in SECTION 16.11, the Borrower
will not directly or indirectly and, in the case of SECTIONS 12.2 through
12.15, will not permit its Subsidiaries to:
SECTION 12.1. Financial Ratios. Permit:
(a) Minimum Adjusted Tangible Net Worth. Adjusted Tangible
Net Worth at any time to be negative, or to be less than $29 million
on the Effective Date or, at any time thereafter, less than $29
million plus an amount equal to 70% of Consolidated Net Income of the
Borrower and its Consolidated Subsidiaries after May 3, 1997 and prior
to such time, on a cumulative basis (without deduction for any net
loss), plus from and after completion of the IPO, 100% of the net cash
proceeds thereof received by the Borrower remaining after making the
AAA distribution.
(b) Ratio of Consolidated Total Liabilities to Tangible Net
Worth. The ratio of total Consolidated Liabilities of the Borrower and
its Consolidated Subsidiaries to Tangible Net Worth of the Borrower
and its Consolidated Subsidiaries on the dates set forth below to be
greater than 2.5 to 1 as of the last day of any fiscal year of the
Borrower.
(c) Minimum Debt Service Coverage. As of the last day of any
fiscal quarter, the Consolidated Debt Service Coverage Ratio of the
Borrower and its Consolidated Subsidiaries for the period of four
consecutive fiscal quarters ending on such last day to be less than
1.2 to 1:
(d) Maximum Funded Debt to EBITDA. Funded Debt to EBITDA as
of the last day of any fiscal quarter of the Borrowers to be greater
than 2.5 to 1.
SECTION 12.2. Indebtedness for Money Borrowed. Create,
assume, or otherwise become or remain obligated in respect of, or permit or
suffer to exist or to be created, assumed or incurred or to be outstanding any
Indebtedness for Money Borrowed, except that this SECTION 12.2 shall not apply
to:
(a) Indebtedness of the Borrower for Money Borrowed
represented by the Loans and the Notes,
(b) Indebtedness for Money Borrowed reflected on SCHEDULE
7.1(K), excluding any such Indebtedness that is to be paid in full on
the Effective Date,
(c) Permitted Purchase Money Indebtedness, and
(d) the Subordinated Indebtedness.
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SECTION 12.3. Guaranties. Become or remain liable with
respect to any Guaranty of any obligation of any other Person.
SECTION 12.4. Investments. Acquire, after the Agreement Date,
any Business Unit or Investment or, after such date, maintain any Investment
other than Permitted Investments, EXCEPT that this Section 12.4 shall not apply
to any Acquisition, of which the Agent and the lenders have at least 30 days'
written notice, (1) of a Business Unit in the same line of business as the
Borrower, (2) for a total Investment (including any Debt of such Acquired
Person or secured by Liens on any acquired assets) of not more than $10
million, (3) in respect of which the Borrower shall have delivered to the Agent
and the Lenders a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared on a pro forma basis for the period of four
full consecutive fiscal quarters ended immediately before the proposed date of
such Acquisition as if such Acquisition had been consummated on the first day
of such four-quarter period (and as though any other Acquisition or issuance of
or permanent reduction in Debt consummated during such four-quarter period had
occurred on the first day of such period, demonstrating compliance on a pro
forma basis with the provisions of this Agreement, (4) in respect of which the
Agent shall have completed a customary due diligence investigation with results
satisfactory to it in its sole discretion and (5) contemporaneously with the
consummation of which, any Acquired Person shall, if requested by the Agent or
the Required Lenders, have delivered an unconditional guaranty of the Secured
Obligations, in form and substance satisfactory to the Agent, or become a party
as a co-Borrower to this Agreement, and, in either case, pledged to the Agent
by instruments and agreements satisfactory in form and substance to the Agent,
all of its property, real and personal, as security for its obligations under
such guaranty or hereunder.
SECTION 12.5. Capital Expenditures. Make or incur any Capital
Expenditures in the aggregate in excess of the amount set forth below for the
fiscal year of the Borrower set forth opposite such amount:
Fiscal Year Amount
----------- ------
1998 $34 million
1999 $10 million
2000 $10 million
plus in each of fiscal years 1999 and 2000, any excess of permitted Capital
Expenditures for the preceding fiscal year over actual Capital Expenditure in
such year.
SECTION 12.6. Restricted Dividend Payments and Purchases,
Etc. Declare or make any Restricted Dividend Payment, Restricted Payment or
Restricted Purchase, EXCEPT that this SECTION 12.6 shall not apply to Permitted
Subchapter S Distribution or to the AAA Distribution or, after completion of
the IPO, to the payment of cash dividends on outstanding common stock of the
Borrower.
SECTION 12.7. Merger, Consolidation and Sale of Assets. Merge
or consolidate with any other Person or sell, lease or transfer or otherwise
dispose of all or a substantial portion of its assets to any Person other than
sales of Inventory in the ordinary course of business.
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SECTION 12.8. Transactions with Affiliates. Effect any
transaction with any Affiliate on a basis less favorable to the Borrower than
would be the case if such transaction had been effected with a Person not an
Affiliate.
SECTION 12.9. Liens. Create, assume or permit or suffer to
exist or to be created or assumed any Lien on any of the Collateral or its
other assets, other than Permitted Liens.
SECTION 12.10. Capitalized Lease Obligations. Without the
consent of the Required Lenders, which consent shall not be unreasonably
withheld, incur or permit to exist any Capitalized Lease Obligations if such
Capitalized Lease Obligation when added to existing Capitalized Lease
Obligations and Permitted Purchase Money Indebtedness of the Borrower would
exceed $1 million in the aggregate.
SECTION 12.11. Operating Leases. Without the consent of the
Required Lenders, enter into any Operating Lease if the aggregate annual rental
payable under all Operating Leases of the Borrower would exceed $5 million in
the aggregate at any time after the Effective Date.
SECTION 12.12. [Reserved].
SECTION 12.13. Plans. Permit any condition to exist in
connection with any Plan which might constitute grounds for the PBGC to
institute proceedings to have such Plan terminated or a trustee appointed to
administer such Plan, and any other condition, event or transaction with
respect to any Plan which could result in the incurrence by the Borrower of any
material liability, fine or penalty.
SECTION 12.14. Sales and Leasebacks. Enter into any
arrangement with any Person providing for the Borrower's leasing from such
Person any real or personal property which has been or is to be sold or
transferred, directly or indirectly, by the Borrower to such Person.
SECTION 12.15. Factored Receivables. Submit for factoring
under the Factoring Agreement any Receivable of an Account Debtor who is also
the Account Debtor with respect to any Receivable that is submitted as an
Eligible Receivable under the Borrowing Base, or submit as an Eligible
Receivable under this Agreement any Receivable of an Account Debtor for whom
any account payable to Borrower (but for the factoring thereof) is then
factored under the Factoring Agreement, or, unless the Factor has declined to
factor such account receivable at the rates in effect under the Factoring
Agreement, factor any account receivable with any Person other than the Factor.
SECTION 12.16. Clean Down. Maintain the aggregate principal
amount of all outstanding Revolving Credit Loans at $20 million or less for a
period of 30 consecutive days during each calendar year ending after December
31, 1997.
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ARTICLE 13
DEFAULT
SECTION 13.1. Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any governmental or nongovernmental body:
(a) Default in Payment. The Borrower shall default in any
payment of principal of or interest on any Loan or any Note when and
as due (whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment, as and when due, of principal of or interest on, any other
Secured Obligation, and such default shall continue for a period of 10
days after any of the Borrower's officers learns of it (whether as a
result of written notice thereof given to the Borrower by the Agent or
any Lender, or otherwise).
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower under this Agreement or any Loan
Document, or any amendment hereto or thereto, shall at any time prove
to have been incorrect or misleading in any material respect when
made.
(d) Default in Performance. The Borrower shall default in the
performance or observance of any term, covenant, condition or
agreement to be performed by the Borrower, contained in
(i) ARTICLES 8, 9, 11 or 12, or SECTIONS 10.1
(insofar as it requires the preservation of the corporate
existence of the Borrower), or 10.8, and the Agent shall have
delivered to the Borrower written notice of such default, or
(ii) this Agreement (other than as specifically
provided for otherwise in this SECTION 13.1) and such default
shall continue (aa) for 30 days after any of the Borrower's
officers learns of it, if the default is of a type that any
Loan Document requires the Borrower to notify the Agent of,
and (bb) in all other cases, for 30 days after written notice
thereof has been given to the Borrower by the Agent.
(e) Indebtedness Cross-Default.
(i) The Borrower or any Subsidiary of the Borrower
shall fail to pay when due and payable the principal of or
interest on the Subordinated Indebtedness or any other
Indebtedness for Money Borrowed (other than the Loans) in an
amount in excess of $10,000, provided that the Borrower's
failure to make a payment of the principal of or interest on
the Subordinated Indebtedness on account of the operation of
the subordination provisions thereof shall not be an Event of
Default, or
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(ii) the maturity of any such Indebtedness shall
have (A) been accelerated in accordance with the provisions
of any indenture, contract or instrument providing for
the creation of or concerning such Indebtedness, or (B)been
required to be prepaid prior to the stated maturity thereof,
or
(iii) any event shall have occurred and be continuing
which would permit any holder or holders of such Indebtedness,
any trustee or agent acting on behalf of such holder or
holders or any other Person so to accelerate such maturity,
and the Borrower shall have failed to cure such default prior
to the expiration of any applicable cure or grace period.
(f) Other Cross-Defaults. The Borrower or any of its
Subsidiaries shall default in the payment when due, or in the
performance or observance, of any obligation or condition of any
agreement, contract or lease (other than this Agreement, the Security
Documents or any such agreement, contract or lease relating to
Indebtedness for Money Borrowed) if the existence of any such defaults,
singly or in the aggregate, could in the reasonable judgment of the
Agent have a Materially Adverse Effect on the Borrower or any of its
Subsidiaries; provided, however, that for the purposes of this
provision where such a default could result only in a monetary loss, a
Material Adverse Effect shall not be deemed to have occurred unless the
aggregate of such losses would exceed $10,000; or the Borrower or any
of its Subsidiaries shall default in the payment when due, or in the
performance or observance, of any obligation or condition of the
Guidance Facility Loan Agreement dated as of the date of this Agreement
by and among the Agent, Lenders, and the Borrower, or the Factoring
Agreement.
(g) Voluntary Bankruptcy Proceeding. The Borrower or any
of its Subsidiaries shall
(i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect),
(ii) file a petition seeking to take advantage of
any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or
composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in any
involuntary case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to consent in
a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, or
liquidator or itself or of a substantial part of its property,
domestic or foreign,
(v) admit in writing its inability to pay its debts
as they become due,
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(vi) make a general assignment for the benefit of
creditors, or
(vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower or any of its
Subsidiaries in any court of competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic
or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts,
(ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Borrower, any of its
Subsidiaries or of all or any substantial part of the assets,
domestic or foreign, of the Borrower or any of its
Subsidiaries,
and such case or proceeding shall continue undismissed or unstayed for
a period of 60 consecutive calendar days, or an order granting the
relief requested in such case or proceeding against the Borrower or any
of its Subsidiaries (including, but not limited to, an order for relief
under such federal bankruptcy laws) shall be entered.
(i) Failure of Agreements. The Borrower shall challenge the
validity and binding effect of any provision of any Loan Document after
delivery thereof hereunder or shall state its intention to make such a
challenge in writing, or any Loan Document, after delivery thereof
hereunder, shall for any reason (except to the extent permitted by the
terms thereof) cease to create a valid and perfected first priority
Lien (except for Permitted Liens) on, or security interest in, any of
the Collateral purported to be covered thereby.
(j) Judgment. A final, unappealable judgment or order for the
payment of money in an amount that exceeds the uncontested insurance
available therefor by $500,000 or more shall be entered against the
Borrower by any court and such judgment or order shall continue
undischarged or unstayed for 10 days.
(k) Attachment. A warrant or writ of attachment or execution
or similar process which exceeds $500,000 in value shall be issued
against any property of the Borrower and such warrant or process shall
continue undischarged or unstayed for 10 days.
(l) Loan Documents. Any event of default under any Loan
Document other than this Agreement shall occur or the Borrower shall
default in the performance or observance of any term, covenant,
condition or agreement contained in, or the payment of any other sum
covenanted to be paid by the Borrower under, any such Loan Document;
PROVIDED, HOWEVER that no event of default under any such Loan Document
shall be deemed to have occurred until any notice required under such
Loan Document has been given and any grace period granted under such
Loan Document has expired.
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(m) ERISA.
(i) Any Termination Event with respect to a Plan
shall occur that, after taking into account the excess, if
any, of (A) the fair market value of the assets of any other
Plan with respect to which a Termination Event occurs on the
same day (but only to the extent that such excess if the
property of the Borrower) over (B) the present value on such
day of all vested nonforfeitable benefits under such other
Plan, results in an Unfunded Vested Accrued Benefit in excess
of $0.00, or
(ii) any Plan shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue
Code or Section 302 of ERISA) for which a waiver has not been
obtained in accordance with the applicable provisions of the
Internal Revenue Code and ERISA, or
(iii) the Borrower is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan resulting from the Borrower's complete or
partial withdrawal (as described in Section 4203 or 4205 of
ERISA) from such Multiemployer Plan.
(n) Change in Control. Xxxxxx and the members of his immediate
family shall cease to own, beneficially and of record, at least 51% of
the outstanding capital stock of the Borrower.
(o) General Insecurity. The occurrence of any event or
condition which, in the Agent's or the Required Lenders' discretion,
constitutes a Material Adverse Effect.
SECTION 13.2. Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon
the occurrence of an Event of Default with respect to the Borrower
specified in SECTION 13.1(G) or (H), (i) the principal of and the
interest on the Loans and any Note at the time outstanding, and all
other amounts owed to the Agent or the Lenders under this Agreement or
any of the Loan Documents and all other Secured Obligations, shall
thereupon become due and payable without presentment, demand, protest,
or other notice of any kind, all of which are expressly waived,
anything in this Agreement or any of the Loan Documents to the contrary
notwithstanding, and (ii) the Revolving Credit Facility and the right
of the Borrower to request borrowings under this Agreement shall
immediately terminate.
(b) Other Remedies. If any Event of Default shall have
occurred, and during the continuance of any such Event of Default, the
Agent may, and at the direction of the Required Lenders in their sole
and absolute discretion shall, do any of the following:
(i) declare the principal of and interest on the
Loans and any Note at the time outstanding, and all other
amounts owed to the Agent or the Lenders under this Agreement
or any of the Loan Documents and all other Secured
Obligations, to be forthwith due and payable, whereupon the
same shall immediately become due and
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payable without presentment, demand, protest or other notice
of any kind, all of which are expressly waived, anything in
this Agreement or the Loan Documents to the contrary
notwithstanding;
(ii) terminate the Revolving Credit Facility and any
other right of the Borrower to request borrowings hereunder;
(iii) notify, or request the Borrower to notify, in
writing or otherwise, any Account Debtor or obligor with
respect to any one or more of the Receivables to make payment
to the Agent, for the benefit of the Lenders, or any agent or
designee of the Agent, at such address as may be specified by
the Agent and if, notwithstanding the giving of any notice,
any Account Debtor or other such obligor shall make payments
to the Borrower, the Borrower shall hold all such payments it
receives in trust for the Agent, for the account of the
Lenders, without commingling the same with other funds or
property of, or held by, the Borrower, and shall deliver the
same to the Agent or any such agent or designee of the Agent
immediately upon receipt by the Borrower in the identical form
received, together with any necessary endorsements;
(iv) settle or adjust disputes and claims directly
with Account Debtors and other obligors on Receivables for
amounts and on terms which the Agent considers advisable and
in all such cases only the net amounts received by the Agent,
for the account of the Lenders, in payment of such amounts,
after deductions of costs and attorneys' fees, shall
constitute Collateral and the Borrower shall have no further
right to make any such settlements or adjustments or to accept
any returns of merchandise;
(v) enter upon any premises in which Inventory or
Equipment may be located and, without resistance or
interference by the Borrower, take physical possession of any
or all thereof and maintain such possession on such premises
or move the same or any part thereof to such other place or
places as the Agent shall choose, without being liable to the
Borrower on account of any loss, damage or depreciation that
may occur as a result thereof, so long as the Agent shall act
reasonably and in good faith;
(vi) require the Borrower to and the Borrower shall,
without charge to the Agent or any Lender, assemble the
Inventory and Equipment and maintain or deliver it into the
possession of the Agent or any agent or representative of the
Agent at such place or places as the Agent may designate and
as are reasonably convenient to both the Agent and the
Borrower;
(vii) at the expense of the Borrower, cause any of
the Inventory and Equipment to be placed in a public or field
warehouse, and the Agent shall not be liable to the Borrower
on account of any loss, damage or depreciation that may occur
as a result thereof, so long as the Agent shall act reasonably
and in good faith;
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(viii) without notice, demand or other process, and
without payment of any rent or any other charge, enter any of
the Borrower's premises and, without breach of the peace,
until the Agent, on behalf of the Lenders, completes the
enforcement of its rights in the Collateral, take possession
of such premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of
the Borrower's Equipment, for the purpose of (A) completing
any work in process, preparing any Inventory for disposition
and disposing thereof, and (B) collecting any Receivable, and
the Agent for the benefit of the Lenders is hereby granted a
license or sublicense and all other rights as may be
necessary, appropriate or desirable to use the Proprietary
Rights in connection with the foregoing, and the rights of the
Borrower under all licenses, sublicenses and franchise
agreements shall inure to the Agent for the benefit of the
Lenders (provided, however, that any use of any federally
registered trademarks as to any goods shall be subject to the
control as to the quality of such goods of the owner of such
trademarks and the goodwill of the business symbolized
thereby);
(ix) exercise any and all of its rights under any
and all of the Security Documents, including, without
limitation, the Construction Loan Agreements;
(x) apply any Collateral consisting of cash to the
payment of the Secured Obligations in any order in which the
Agent, on behalf of the Lenders, may elect or use such cash in
connection with the exercise of any of its other rights
hereunder or under any of the Security Documents;
(xi) establish or cause to be established one or
more Lockboxes or other arrangement for the deposit of
proceeds of Receivables, and, in such case, the Borrower
shall cause to be forwarded to the Agent at the Agent's
Office, on a daily basis, copies of all checks and other
items of payment and deposit slips related thereto deposited
in such Lockboxes, together with collection reports in form
and substance satisfactory to the Agent; and
(xii) exercise all of the rights and remedies of a
secured party under the Uniform Commercial Code and under any
other Applicable Law, including, without limitation, the
right, without notice except as specified below and with or
without taking the possession thereof, to sell the Collateral
or any part thereof in one or more parcels at public or
private sale, at any location chosen by the Agent, for cash,
on credit or for future delivery, and at such price or prices
and upon such other terms as the Agent may deem commercially
reasonable. The Borrower agrees that, to the extent notice of
sale shall be required by law, at least 10 days notice to the
Borrower of the time and place of any public sale or the time
after which any private sale is to be made shall constitute
reasonable notification, but notice given in any other
reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice
of sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and
place fixed
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therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
SECTION 13.3. Application of Proceeds. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral following
an Event of Default shall be applied or paid over as follows:
(a) First: to the payment of all costs and expenses incurred
in connection with such sale or other realization, including reasonable
attorneys' fees,
(b) Second: to the payment of the Secured Obligations (with
the Borrower remaining liable for any deficiency) as the Agent may
elect,
(c) Third: the balance (if any) of such proceeds shall be paid
to the Borrower, subject to any duty imposed by law, or otherwise to
whomsoever shall be entitled thereto.
THE BORROWER SHALL REMAIN LIABLE AND WILL PAY, ON DEMAND, ANY DEFICIENCY
REMAINING IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH INTEREST THEREON
AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER ON SUCH
SECURED OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE SECURED
OBLIGATIONS.
SECTION 13.4. Power of Attorney. In addition to the
authorizations granted to the Agent under SECTION 9.13 or under any other
provision of this Agreement or of any other Loan Document, during the
continuance of an Event of Default, the Borrower hereby irrevocably designates,
makes, constitutes and appoints the Agent (and all Persons designated by the
Agent from time to time) as the Borrower's true and lawful attorney, and agent
in fact, and the Agent, or any agent of the Agent, may, without notice to the
Borrower, and at such time or times as the Agent or any such agent in its sole
discretion may determine, in the name of the Borrower, the Agent or the Lenders,
(i) demand payment of the Receivables,
(ii) enforce payment of the Receivables by legal
proceedings or otherwise,
(iii) exercise all of the Borrower's rights and
remedies with respect to the collection of Receivables,
(iv) settle, adjust, compromise, extend or renew any
or all of the Receivables,
(v) settle adjust or compromise any legal
proceedings brought to collect the Receivables,
(vi) discharge and release the Receivables or any of
them,
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(vii) prepare, file and sign the name of the
Borrower on any proof of claim in bankruptcy or any similar
document against any Account Debtor,
(viii) prepare, file and sign the name of the
Borrower on any notice of Lien, assignment or satisfaction of
Lien, or similar document in connection with any of the
Collateral,
(ix) endorse the name of the Borrower upon any
chattel paper, document, instrument, notice, freight xxxx,
xxxx of lading or similar document or agreement relating to
the Receivables, the Inventory or any other Collateral,
(x) use the stationery of the Borrower and sign
the name of the Borrower to verifications of the Receivables
and on any notice to the Account Debtors,
(xi) open the Borrower's mail,
(xii) notify the post office authorities to change
the address for delivery of the Borrower's mail to an address
designated by the Agent, and
(xiii) use the information recorded on or contained
in any data processing equipment and computer hardware and
software relating to the Receivables, Inventory or other
Collateral to which the Borrower have access.
SECTION 13.5. Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the Agent
and the Lenders under this Agreement, the Notes and each of the Loan
Documents shall be cumulative and not exclusive of any rights or
remedies which it or they would otherwise have. In exercising such
rights and remedies the Agent and the Lenders may be selective and no
failure or delay by the Agent or any Lender in exercising any right
shall operate as a waiver of it, nor shall any single or partial
exercise of any power or right preclude its other or further exercise
or the exercise of any other power or right.
(b) Waiver of Marshalling. The Borrower hereby waives any
right to require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this ARTICLE
13 or elsewhere in this Agreement or in any of the Loan Documents shall
be construed as requiring or obligating the Agent, any Lender or any
agent or designee of the Agent or any Lender to make any demand, or to
make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any
action, with respect to any Receivable or any other Collateral or the
monies due or to become due thereunder or in connection therewith, or
to take any steps necessary to preserve any rights against prior
parties, and the Agent, the Lenders and their agents or designees shall
have no liability to the Borrower for actions taken pursuant to this
ARTICLE 13, any other provision of this
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Agreement or any of the Loan Documents so long as the Agent or such
Lender shall act reasonably and in good faith.
(d) Appointment of Receiver. In any action under this ARTICLE
13, the Agent shall be entitled during the continuance of an Event of
Default to the appointment of a receiver, without notice of any kind
whatsoever, to take possession of all or any portion of the Collateral
and to exercise such power as the court shall confer upon such
receiver.
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ARTICLE 14
ASSIGNMENTS
SECTION 14.1. Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future holders of
the Notes, and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Required
Lenders.
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of the Loans
at the time owing to it and the Notes held by it); provided that (i)
each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning
Lender that is subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent) shall in no event be less than the Minimum
Commitment, (iii) in the case of a partial assignment, the amount of
the Commitment that is retained by the assigning Lender (determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall in no event be less than
the Minimum Commitment, (iv) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in
the Register (as defined in SECTION 14.1(D)) an Assignment and
Acceptance, together with any Note or Notes subject to such assignment
and such assignee's pro rata share of the Agent's syndication expenses
(pro rata in proportion to the share purchased by such assignee
relative to all assigned shares), (v)such assignment shall not, without
the consent of the Borrower, require the Borrower to file a
registration statement with the Securities and Exchange Commission or
apply to or qualify the Loans or the Notes under the blue sky laws of
any state, and (vi)the representation contained in SECTION 14.2 hereof
shall be true with respect to any such proposed assignee. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder, and (y) the Lender assignor
thereunder shall, to the extent provided in such assignment, be
released from its obligations under this Agreement.
(c) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, such Lender assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
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genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower
or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements referred to in SECTION 7.1(O) and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Agent, such Lender assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed by it
as a Lender.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders and the Commitment Percentage of,
and principal amount of the Loans owing to, each Lender from time to
time (the "Register"). The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Agent and the
Lenders may treat each person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Eligible Assignee together with any Note
or Notes subject to such assignment and the written consent to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, (iii) give prompt notice
thereof to the Lenders and the Borrower, and (iv) promptly deliver a
copy of such Acceptance and Assignment to the Borrower. Within five
Business Days after receipt of notice, the Borrower shall execute and
deliver to the Agent in exchange for the surrendered Note or Notes a
new Note or Notes to the order of such Eligible Assignee in amounts
equal to the Commitment Percentage assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and a new Note or Notes to
the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Notes delivered to the assignor Lender. Each
surrendered Note or Notes shall be canceled and returned to the
Borrower.
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(f) Each Lender may, without the consent of the Borrower, sell
participations to one or more Eligible Assignees in all or a portion of
its rights and obligations under this Agreement (including, without
limitation, all or a portion of its commitments hereunder and the Loans
owing to it and the Notes held by it); PROVIDED, HOWEVER, that (i) each
such participation shall be in an amount not less than the Minimum
Commitment, (ii) such Lender's obligations under this Agreement
(including, without limitation, its commitments hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iv) such
Lender shall remain the holder of the Notes held by it for all purposes
of this Agreement, (v) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement; PROVIDED, that such Lender may agree with any participant
that such Lender will not, without such participant's consent, agree to
or approve any waivers or amendments which would reduce the principal
of or the interest rate on any Loans, extend the term or increase the
amount of the commitments of such participant, reduce the amount of any
fees to which such participant is entitled, extend any scheduled
payment date for principal or release Collateral securing the Loans
(other than Collateral disposed of pursuant to SECTION 9.7 hereof or
otherwise in accordance with the terms of this Agreement or the
Security Documents), and (vi) any such disposition shall not, without
the consent of the Borrower, require any Borrower to file a
registration statement with the Securities and Exchange Commission to
apply to qualify the Loans or the Notes under the blue sky law of any
state. The Lender selling a participation to any bank or other entity
that is not an Affiliate of such Lender shall give prompt notice
thereof to the Borrower.
(g) Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant
to this SECTION 14.1, disclose to the assignee, participant, proposed
assignee or proposed participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower,
provided that, prior to any such disclosure, each such assignee,
proposed assignee, participant or proposed participant shall agree with
the Borrower or such Lender (which in the case of an agreement with
only such Lender, the Borrower shall be recognized as a third party
beneficiary thereof) to preserve the confidentiality of any
confidential information relating to the Borrower received from such
Lender.
(h) Notwithstanding SECTIONS 14.1(B) and 14.1(F), neither
NationsBank nor NationsBanc Commercial Corporation shall assign or
grant any participation in its rights, interests, and obligations under
this Agreement without the written consent of Fleet Capital Corporation
or its corporate successor (if Fleet Capital Corporation or any of its
Affiliates then holds any interest in any Loan or Note) unless, after
such assignment or participation, NationsBank and its Affiliates
collectively own, beneficially and of record, at least 25% of all
Lenders' rights, interests, and obligations under this Agreement.
(i) Notwithstanding SECTIONS 14.1(B) and 14.1(F), any Lender
who proposes to assign or to grant any participation in any of its
rights, interests, and obligations under this Agreement (a
"Transferring Lender") must give at least seven Business Days' prior
written notice thereof to each other Lender (each, a "Notified
Lender"), along with a notice that
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each Notified Lender may share in such assignment or participation
under this SECTION 14.1 pro rata in accordance with its Commitment
Percentage for the rights, interests, and obligations being assigned or
participated (the "Transferred Interest"), and a copy of the proposed
documentation for the transfer of the Transferred Interest. (For
example, if a Transferring Lender having a 25% Commitment Percentage
for Revolving Credit Loans proposes to assign half its rights,
interests, and obligations for Revolving Credit Loans (viz., a $10
million "piece"), and at that time there were two Notified Lenders,
having 25% and 50% Commitment Percentages for Revolving Credit Loans,
such Notified Lenders would be entitled to assign to the assignee $2.5
million and $5 million, respectively, of their own rights, interests,
and obligations for Revolving Credit Loans, on the same terms as the
Transferring Lender, and the Transferring Lender would be entitled to
assign to such assignee only $2.5 million, plus any amount not assigned
to such assignee by the Notified Lenders, of the Transferring Lender's
rights, interests, and obligations for Revolving Credit Loans.) To
share in such assignment or participation, a Notified Lender must give
written notice to the Transferring Lender, within five Business Days
after receiving the notice described in the first sentence of this
SECTION 14.1(I), that such Notified Lender will assign or participate
an amount (which shall be specified in such notice to the Transferring
Lender) of its rights, interests, and obligations in accordance with
the terms of this SECTION 14.1(I).
SECTION 14.2. Representation of Lenders. Each Lender hereby
represents that it will make each Loan hereunder as a commercial loan for its
own account in the ordinary course of its business; PROVIDED, HOWEVER, that
subject to SECTION 14.1 hereof, the disposition of the Notes or other evidence
of the Secured Obligations held by any Lender shall at all times be within its
exclusive control.
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ARTICLE 15
AGENT
SECTION 15.1. Appointment of Agent. Each of the Lenders hereby
irrevocably designates and appoints NationsBank, N.A. as the agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes Agent, subject to the provisions of SECTION 5.6(C), as
the Agent for such Lender to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Agreement and such other Loan Documents, including, without limitation, to make
determinations as to the eligibility of Inventory and Receivables and to lower
the advance ratios contained in the definition of "Borrowing Base", together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement or such other Loan
Documents, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or the other Loan
Documents or otherwise exist against the Agent.
SECTION 15.2. Delegation of Duties. The Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 15.3. Exculpatory Provisions. Neither the Agent nor
any of its trustees, officers, directors, employees, agents, attorneys-in-fact
or other Affiliates (collectively, "Agent and Agent-Persons") shall be (i)
liable to any Lender for any action lawfully taken or omitted to be taken by
Agent or any Agent-Person under or in connection with this Agreement or the
other Loan Documents (except for Agent's or such Agent-Person's own gross
negligence or willful misconduct), or (ii) responsible in any manner to any
Lender for any recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement or the other Loan
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower; except that, if any Lender so
requests, the Agent will conduct at least two field examinations of the Borrower
per year.
SECTION 15.4. Reliance by Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or communication (written or oral) believed by it to be genuine and
correct and to have
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been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee named in any Note as the owner thereof for
all purposes unless such Note shall have been transferred in accordance with
SECTION 14.1. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement and the other Loan Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the Notes in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
SECTION 15.5. Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall promptly give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders; PROVIDED
that unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) continue making Revolving Credit Loans to
the Borrower on behalf of the Lenders in reliance on the provisions of SECTION
5.6 and take such other action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 15.6. Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except as otherwise expressly required by the
Loan Documents, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
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SECTION 15.7. Indemnification. The Lenders agree to indemnify
the Agent in its capacity as agent hereunder (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; PROVIDED that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's gross negligence or
willful misconduct or resulting solely from transactions or occurrences that
occur at a time after such Lender has assigned all of its interests, rights and
obligations under this Agreement pursuant to SECTION 14.1 or, in the case of a
Lender to which an assignment is made hereunder pursuant to SECTION 14.1, at a
time before such assignment. The agreements in this subsection shall survive the
payment of the Notes, the Secured Obligations and all other amounts payable
hereunder and the termination of this Agreement.
SECTION 15.8. Agent in Its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrower, Xxxxxx, or any of the Borrower's
Affiliates if the Agent were not the agent hereunder. With respect to its
Commitment, the Loans made or renewed by it and any Note issued to it and any
Letter of Credit issued by it, the Agent shall have and may exercise the same
rights and powers under this Agreement and the other Loan Documents and is
subject to the same obligations and liabilities as and to the extent set forth
herein and in the other Loan Documents for any other Lender. The terms "Lenders"
or "Required Lenders" or any other term shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Lender or
one of the Required Lenders.
SECTION 15.9. Successor Agent. The Agent may resign as agent
under this Agreement upon 30 days notice to the Lenders. If the Agent shall
resign as agent under this Agreement, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld and is hereby deemed given with respect to the appointment as successor
agent of NationsBank, Fleet Capital Corporation, NationsBanc Commercial
Corporation, or any Eligible Assignee), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term "Agent"
shall mean such successor agent effective upon its appointment, and the former
Agent's rights, powers and duties as agent hereunder shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Notes. The effective date
of an Agent's resignation shall in all cases be postponed until a successor
agent has been appointed. After any retiring Agent's resignation hereunder as
agent, the provisions of SECTION 15.7 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
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SECTION 15.10. Notices from Agent to Lenders. The Agent shall
promptly, upon receipt thereof, forward to each Lender copies of any written
notices, reports or other information supplied to it by the Borrower which is
requested by such Lender or which the Borrower is not required to supply
directly to the Lenders.
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ARTICLE 16
MISCELLANEOUS
SECTION 16.1. Notices.
(a) Method of Communication. Except as specifically provided
in this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by
telephone, subsequently confirmed in writing. Notices in writing shall
be delivered personally or sent by certified or registered mail,
postage pre-paid, or by overnight courier or facsimile transmission and
shall be deemed received in the case of personal delivery, when
delivered, in the case of mailing, when receipted for, in the case of
overnight delivery, on the next Business Day after delivery to the
courier, and in the case of facsimile transmission, upon transmittal,
provided that in the case of notices to the Agent, notice shall be
deemed to have been given only when such notice is actually received by
the Agent. A telephonic notice to the Agent, as understood by the
Agent, will be deemed to be the controlling and proper notice in the
event of a discrepancy with or failure to receive a confirming written
notice.
(b) Addresses for Notices. Notices to any party shall be sent
to it at the following addresses, or any other address of which all the
other parties are notified in writing
If to the Borrower: Meadowcraft, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx Xxxxxxxx, CFO
Facsimile No.: (000) 000-0000
If to the Agent: NationsBank, N.A.
Xxx Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000-X
Xxxxxxxxxx, Xxxxxxx 00000
Attn.: W. Xxxx Xxxxxxx
Facsimile No.: 000-000-0000
If to a Lender: At the address of such
Lender set forth on the signature
page hereof.
(c) Agent's Office. The Agent hereby designates its office
located at 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or any
subsequent office which shall have been specified for such purpose by
written notice to the Borrower, as the office to which payments due are
to be made and at which Loans will be disbursed.
SECTION 16.2. Expenses. The Borrower agrees to pay or
reimburse on demand all costs and expenses incurred by the Agent or any Lender,
including, without limitation, the reasonable fees and disbursements of counsel,
in connection with
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(a) the negotiation, preparation, execution, delivery,
administration, enforcement and termination of this Agreement and each
of the other Loan Documents, whenever the same shall be executed and
delivered, including, without limitation
(i) the out-of-pocket costs and expenses incurred in
connection with the administration and interpretation of this Agreement
and the other Loan Documents;
(ii) the costs and expenses of appraisals of the Collateral;
(iii) the costs and expenses of lien and title searches and
title insurance;
(iv) the costs and expenses of environmental reports with
respect to the Real Estate;
(v) taxes, fees and other charges for recording the
Mortgages, filing the Financing Statements and continuations and the
costs and expenses of taking other actions to perfect, protect, and
continue the Security Interests;
PROVIDED, HOWEVER, that the Borrower shall not be required to pay the
expenses of any Person which becomes a Lender more than 90 days after
the Effective Date incurred in connection with such Person's so
becoming a Lender;
(b) the negotiation, preparation, execution and delivery of
any actual or proposed waiver, amendment, supplement or consent by the
Agent or the Lenders relating to this Agreement or any of the Loan
Documents;
(c) sums paid or incurred to pay any amount or take any action
required of the Borrower under the Loan Documents that the Borrower
fails to pay or take;
(d) costs of inspections and verifications of the Collateral
(including per diem fees charged by the Agent, travel, lodging, and
meals) for inspections of the Collateral and the Borrower's operations
and books and records by the Agent up to four times per year,
regardless of whether an Event of Default exists;
(e) costs of inspections and verifications of the Collateral
(including per diem fees charged by the Agent or a Lender, travel,
lodging, and meals) for inspections of the Collateral and the
Borrower's operations and books and records by the Agent or any Lender,
whenever an Event of Default exists;
(f) costs and expenses of forwarding loan proceeds, collecting
checks and other items of payment, and establishing and maintaining
each Controlled Disbursement Account, Agency Account and Lockbox;
(g) costs and expenses of preserving and protecting the
Collateral;
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(h) consulting, after the occurrence of a Default, with one or
more Persons, including appraisers, accountants and lawyers, concerning
the value of any Collateral for the Secured Obligations or related to
the nature, scope or value of any right or remedy of the Agent or any
Lender hereunder or under any of the Loan Documents, including any
review of factual matters in connection therewith, which expenses shall
include the fees and disbursements of such Persons;
(i) reasonable costs and expenses paid or incurred to obtain
payment of the Secured Obligations, enforce the Security Interests,
sell or otherwise realize upon the Collateral, and otherwise enforce
the provisions of the Loan Documents, or to prosecute or defend any
claim in any way arising out of, related to or connected with, this
Agreement or any of the Loan Documents, which expenses shall include
the reasonable fees and disbursements of counsel and of experts and
other consultants retained by the Agent or any Lender.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrower. The Borrower
hereby authorizes the Agent and the Lenders to debit the Borrower's Loan
Accounts (by increasing the principal amount of the Revolving Credit Loan) in
the amount of any such costs and expenses owed by the Borrower when due.
SECTION 16.3. Stamp and Other Taxes. The Borrower will pay any
and all stamp, registration, recordation and similar taxes, fees or charges and
shall indemnify the Agent and the Lenders against any and all liabilities with
respect to or resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined to be payable in
connection with the execution, delivery, performance or enforcement of this
Agreement and any of the Loan Documents or the perfection of any rights or
security interest thereunder, including, without limitation, the Security
Interest.
SECTION 16.4. Setoff. In addition to any rights now or
hereafter granted under Applicable Law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender and each
Affiliate of each Lender are hereby authorized by the Borrower at any time or
from time to time, without notice to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by any Lender or any
Affiliate of any Lender to or for the credit or the account of the Borrower
against and on account of the Secured Obligations (any such setoff and
appropriation to be subject in all respects to SECTION 16.22 and, as to the
Factor, to limitations in the Assignment of Factoring Proceeds), irrespective or
whether or not:
(a) the Agent or such Lender shall have made any demand under
this Agreement or any of the Loan Documents, or
(b) the Agent or such Lender shall have declared any or all of
the Secured Obligations to be due and payable as permitted by SECTION
13.2 and although such Secured Obligations shall be contingent or
unmatured.
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SECTION 16.5. Litigation. THE BORROWER, THE AGENT AND EACH
LENDER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION
MAY BE COMMENCED BY OR AGAINST THE BORROWER, THE AGENT AND SUCH LENDER ARISING
OUT OF THIS AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF
ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE BORROWER AND THE AGENT OR ANY
LENDER OF ANY KIND OR NATURE. The Borrower, the Agent and the Lenders hereby
agree that the federal court of the Northern District of Georgia or, at the
option of the Agent or any Lender, any court in which the Agent or such Lender
shall initiate legal or equitable proceedings and which has subject matter
jurisdiction over the matter in controversy, shall have nonexclusive
jurisdiction to hear and determine any claims or disputes between the Borrower
and the Agent or such Lender, pertaining directly or indirectly to this
Agreement or the Loan Documents or to any matter arising therefrom. The Borrower
expressly submits and consents in advance to such jurisdiction in any action or
proceeding commenced in such courts, hereby waiving personal service of the
summons and complaint, or other process or papers issued therein and agreeing
that service of such summons and complaint or other process or papers may be
made by registered or certified mail addressed to the Borrower at the address of
the Borrower set forth in SECTION 16.1. Should the Borrower fail to appear or
answer any summons, complaint, process or papers so served within 30 days after
the mailing thereof, it shall be deemed in default and an order and/or judgment
may be entered against it as demanded or prayed for in such summons, complaint,
process or papers. The nonexclusive choice of forum set forth in this section
shall not be deemed to preclude the enforcement of any judgment obtained in such
forum or the taking of any action under this Agreement to enforce same in any
appropriate jurisdiction.
SECTION 16.6. Waiver of Rights. THE BORROWER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICH BORROWER HAS UNDER CHAPTER
14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR PROVISION OF
APPLICABLE LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR TO THE ISSUANCE OF A
WRIT OF POSSESSION ENTITLING THE AGENT OR ANY LENDER, OR THE SUCCESSORS AND
ASSIGNS OF THE AGENT OR SUCH LENDER TO POSSESSION OF THE COLLATERAL UPON EVENT
OF DEFAULT. Without limiting the generality of the foregoing and without
limiting any other right which the Agent or the Lenders may have, the Borrower
consents that if the Agent files a petition for an immediate writ of possession
in compliance with Sections 00-00-000 and 00-00-000 of the Official Code of
Georgia or under any similar provision of applicable law, and this waiver or a
copy hereof is alleged in such petition and attached thereto, the court before
which such petition is filed may dispense with all rights and procedures herein
waived and may issue forthwith an immediate writ of possession in accordance
with Chapter 14 of Title 44 of the Official Code of Georgia or in accordance
with any similar provision of applicable law, without the necessity of an
accompanying bond as otherwise required by Section 00-00-000 of the Official
Code of Georgia or by any similar provision under applicable law.
SECTION 16.7. Consent to Advertising and Publicity. With
the prior written consent of the Borrower, which consent shall not be
unreasonably withheld, the Agent, on behalf of the Lenders, may issue and
disseminate to the public information describing the credit
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accommodation entered into pursuant to this Agreement, including the name and
address of the Borrower, the amount, interest rate, maturity, collateral and a
general description of the Borrower's business.
SECTION 16.8. Reversal of Payments. The Agent and each Lender
shall have the continuing and exclusive right to apply, reverse and re-apply any
and all payments to any portion of the Secured Obligations in a manner
consistent with the terms of this Agreement. To the extent the Borrower makes a
payment or payments to the Agent, for the account of the Lenders, or any Lender
receives any payment or proceeds of the Collateral for the Borrower's benefit,
which payment(s) or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the Secured Obligations or part thereof intended
to be satisfied shall be revived and continued in full force and effect, as if
such payment or proceeds had not been received by the Agent or such Lender.
SECTION 16.9. Injunctive Relief. The Borrower recognizes
that, in the event the Borrower fails to perform, observe or discharge any of
its obligations or liabilities under this Agreement, any remedy at law may
prove to be inadequate relief to the Agent and the Lenders; therefore, the
Borrower agrees that if any Event of Default shall have occurred and be
continuing, the Agent and the Lenders, if the Agent or any Lender so requests,
shall be entitled to temporary and permanent injunctive relief without the
necessity of proving actual damages.
SECTION 16.10. Accounting Matters. All financial and
accounting calculations, measurements and computations made for any purpose
relating to this Agreement, including, without limitation, all computations
utilized by the Borrower to determine whether it is in compliance with any
covenant contained herein, shall, unless this Agreement otherwise provides or
unless Required Lenders shall otherwise consent in writing, be performed in
accordance with GAAP.
SECTION 16.11. Amendments.
(a) Except as set forth in SUBSECTION (B) below, any term,
covenant, agreement or condition of this Agreement or any of the Loan
Documents may be amended or waived, and any departure therefrom may be
consented to if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders and, in the case of an amendment
(other than an amendment described in SECTION 16.11(D)), by the
Borrower, and in any such event, the failure to observe, perform or
discharge any such term, covenant, agreement or condition (whether such
amendment is executed or such waiver or consent is given before or
after such failure) shall not be construed as a breach of such term,
covenant, agreement or condition or as a Default or an Event of
Default. Unless otherwise specified in such waiver or consent, a waiver
or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given. In the event
that any such waiver or amendment is requested by the Borrower, the
Agent and the Lenders may require and charge a fee in connection
therewith and consideration thereof in such amount as shall be
determined by the Agent and the Required Lenders in their discretion.
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(b) Except as otherwise set forth in this Agreement, without
the prior unanimous written consent of the Lenders,
(i) no amendment, consent or waiver shall affect
the amount or extend the time of the obligation of the
Lenders to make Loans or extend the originally scheduled
time or times of payment of the principal of any Loan
or alter the time or times of payment of interest on any Loan
or the amount of the principal thereof or the rate of
interest thereon or the amount of any fee payable hereunder
to or for the benefit of the Lenders or permit any
subordination of the principal or interest on such Loan,
permit the subordination of the Security Interests in any
material Collateral or amend the definition of "Borrowing
Base", the definition of "Required Lenders" (or any
requirement that the Agent act or not act as instructed by
Required Lenders), the definition of "Eligible Assignee", the
definition of "Commitment Percentage", the definitions used
in SECTION 5.1 hereof relating to interest rates, the
provisions of ARTICLE 13 or 15 or of SECTION 5.1(C)(V), (VI),
(VII), OR (VIII), 5.9, 14.1(B), 16.11, 16.21, or 16.22, and
the ratable treatment of each Lender with respect to
obligations hereunder or with respect to repayment of Loans
and entitlement to proceeds of Collateral,
(ii) no material Collateral shall be released by the
Agent other than as specifically permitted in this Agreement,
and
(iii) no amendment, consent, or waiver shall be made
with respect to any Note;
PROVIDED, HOWEVER, that anything herein to the contrary
notwithstanding, Required Lenders shall have the right to waive any
Default or Event of Default (other than those caused by Borrower's
failure to comply with a covenant which requires the unanimous written
consent of the Lenders to amend) and the consequences hereunder of such
Default or Event of Default and shall have the right to enter into an
agreement with the Borrower or Xxxxxx providing for the forbearance
from the exercise of any remedies provided hereunder or under the other
Loan Documents without waiving any Default or Event of Default.
(c) The making of Loans hereunder by the Lenders during the
existence of a Default or Event of Default shall not be deemed to
constitute a waiver of such Default or Event of Default.
(d) Notwithstanding any provision of this Agreement or the
other loan documents to the contrary, no consent, written or otherwise,
of the Borrower shall be necessary or required in connection with any
amendment to ARTICLE 15 or SECTION 5.6, and any amendment to such
provisions shall be effected solely by and among the Agent and the
Lenders, provided that no such amendment shall impose any additional
obligation on the Borrower.
(e) If a Lender refuses to consent to any requested amendment
or waiver that relates to or is triggered by a then-existing material
Event of Default (failure to consent
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within ten Business Days being deemed in any event a refusal to
consent), then, in order to effectuate such amendment or waiver, the
other Lenders (to the extent that each elects to do so) may at any time
thereafter buy (and such refusing Lender shall sell) all (but, in the
aggregate, not less than all) such refusing Lender's interest, rights,
and obligations under this Agreement (including its Loans and Notes),
for the principal amount of such Lender's Loans and all interest
accrued thereon. Such refusing Lender shall cease to be a "Lender" upon
such sale (but shall retain its rights and be subject to its
obligations for events and circumstances occurring or existing before
it ceases to be a "Lender").
SECTION 16.12. Performance of Borrower's Duties.
(a) The Borrower's obligations under this Agreement and each
of the Loan Documents shall be performed by the Borrower at its sole
cost and expense.
(b) If the Borrower shall fail to do any act or thing which it
has covenanted to do under this Agreement or any of the Loan Documents,
the Agent, on behalf of the Lenders, may (but shall not be obligated
to) do the same or cause it to be done either in the name of the Agent
or the Lenders or in the name and on behalf of the Borrower, and the
Borrower hereby irrevocably authorizes the Agent so to act.
SECTION 16.13. Indemnification. The Borrower agrees to
reimburse the Agent and the Lenders for all costs and expenses, including
reasonable counsel fees and disbursements, incurred, and to indemnify and hold
the Agent and the Lenders harmless from and against all losses suffered by, the
Agent or any Lender in connection with
(i) the exercise by the Agent or any Lender of
any right or remedy granted to it under this Agreement or any
of the Loan Documents,
(ii) any claim, and the prosecution or defense
thereof, arising out of or in any way connected with this
Agreement or any of the Loan Documents, and
(iii) the collection or enforcement of the
Secured Obligations or any of them,
other than such costs, expenses and liabilities arising out of such Person's
gross negligence or willful misconduct.
SECTION 16.14. All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Agent and the Lenders and any
Persons designated by the Agent or the Lenders pursuant to any provisions of
this Agreement or any of the Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Secured Obligations
remain unpaid or unsatisfied.
SECTION 16.15. Survival. Notwithstanding any
termination of this Agreement,
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(a) until all Secured Obligations have been irrevocably paid
in full or otherwise satisfied, the Agent, for the benefit of the
Lenders, shall retain its Security Interest and shall retain all rights
under this Agreement and each of the Security Documents with respect to
such Collateral as fully as though this Agreement had not been
terminated,
(b) the indemnities to which the Agent and the Lenders are
entitled under the provisions of this ARTICLE 16 and any other
provision of this Agreement and the Loan Documents shall continue in
full force and effect and shall protect the Agent and the Lenders
against events arising after such termination as well as before, and
(c) in connection with the termination of this Agreement and
the release and termination of the Security Interests, the Agent, on
behalf of itself as agent and the Lenders, may require such assurances
and indemnities as it shall reasonably deem necessary or appropriate to
protect the Agent and the Lenders against loss on account of such
release and termination, including, without limitation, with respect to
credits previously applied to the Secured Obligations that may
subsequently be reversed or revoked.
SECTION 16.16. Titles and Captions. Titles and captions of
Articles, Sections and subsections in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement.
SECTION 16.17. Severability of Provisions. Any provision of
this Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 16.18. Governing Law. This Agreement and the Notes
shall be construed in accordance with and governed by the law of the State of
Georgia.
SECTION 16.19. Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
SECTION 16.20. Reproduction of Documents. This Agreement, each
of the Loan Documents and all documents relating thereto, including, without
limitation, (a)consents, waivers and modifications that may hereafter be
executed, (b)documents received by the Agent or any Lender, and (c)financial
statements, certificates and other information previously or hereafter furnished
to the Agent or any Lender, may be reproduced by the Agent or such Lender by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and such Person may destroy any original document so produced.
Each party hereto stipulates that, to the extent permitted by Applicable Law,
any such reproduction shall be as admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the original shall
be in existence and whether or not such reproduction was made by the Agent or
such Lender in the
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regular course of business), and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 16.21. Increased Capital. If any Lender shall have
determined that the adoption of any applicable law, rule, regulation, guideline,
directive or request (whether or not having force of law) regarding capital
requirements for banks or bank holding companies, or any change therein or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender with any of the foregoing
imposes or increases a requirement by such Lender to allocate capital resources
to such Lender's Commitment to make Loans hereunder which has or would have the
effect of reducing the return on such Lender's capital to a level below that
which such Lender could have achieved (taking into consideration such Lender's
then existing policies with respect to capital adequacy and assuming full
utilization of such Lender's capital) but for such adoption, change or
compliance by any amount deemed by such Lender to be material: (i)such Lender
shall promptly after its determination of such occurrence give notice thereof to
the Borrower; and (ii)the Borrower shall pay to such Lender from time to time on
demand such amount as such Lender certifies to be the amount that will
compensate it for such reduction. A certificate of such Lender claiming
compensation under this SECTION 16.21 shall be conclusive in the absence of
manifest error. Such certificate shall set forth the nature of the occurrence
giving rise to such compensation, the additional amount or amounts to be paid to
it hereunder and the method by which such amounts were determined. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
SECTION 16.22. Pro-Rata Participation.
(a) If any Lender shall obtain any payment or reduction
(including any amounts received as adequate protection of a deposit
treated as cash collateral under the Bankruptcy Code) of any Secured
Obligation of Borrower hereunder (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess
of its pro rata share of payments or reductions on account of such
Secured Obligations obtained by all of the Lenders, such Lender shall
forthwith (i) notify the other Lenders and the Agent of such receipt,
and (ii) purchase from the other Lenders such participations in the
affected Secured Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or reduction, net of
costs incurred in connection therewith, on a pro rata basis (in
proportion to all Secured Obligations); PROVIDED, that if all or any
portion of such excess payment or reduction is thereafter recovered
from such purchasing Lender or additional costs are incurred, the
purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest.
The Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this SECTION 16.22 may, to the fullest
extent permitted by Applicable Law, exercise all of its rights of
payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of
the Borrower in the amount of such participation.
(b) Each Lender which receives such a secured claim shall
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this SECTION
16.22 to share in the benefits of any recovery on such secured claim.
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(c) The Borrower expressly consents to the foregoing
arrangements.
SECTION 16.23. Not an "Alabama" Transaction. The Borrower, the
Agent, and the Lenders expressly acknowledge and agree that (i) the Borrower's
obligations hereunder were not issued in the State of Alabama, and none of the
Loan Documents were entered into or delivered in the State of Alabama, and (ii)
the transactions contemplated by this Agreement and the related documents are
intended to be transactions in interstate commerce within the meaning of the
Constitution of the United States of America. If, notwithstanding the foregoing,
any court of competent jurisdiction should reach a contrary conclusion, the
Borrower hereby expressly waives, disclaims, and agrees not to assert or
otherwise seek to invoke any right, remedy, or option under or as a result of
any applicable law of the State of Alabama relating to the transacting of
business in Alabama. The Borrower further acknowledges and agrees that it cannot
require the Agent or any Lender to perform any of its obligations hereunder in
the State of Alabama.
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IN WITNESS WHEREOF, the parties hereto have caused this Loan
and Security Agreement to be executed by their duly authorized officers in
several counterparts all as of the day and year first written above.
BORROWER:
MEADOWCRAFT, INC.
[Corporate Seal]
By:
-----------------------------------
Xxxxxxx X. XxXxxxx
President
Attest:
By:
----------------------
Xxxxx Xxxx
Assistant Secretary
LENDERS:
Commitment Amount: NATIONSBANK, N.A.
47.4% of the Revolving Credit
Facility and each Term Loan,
Letter of Credit, and By:
--------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President
Address: 000 Xxxxxxxxx Xx, XX
Xxxxxxx, Xxxxxxx 00000
Attn.: W. Xxxx Xxxxxxx
Facsimile No.: 000-000-0000
(Signatures continued on following page)
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(Signatures continued from previous page)
Commitment Amount: FLEET CAPITAL CORPORATION
29% of the Revolving Credit Facility
and each Term Loan, Letter of Credit,
and IRB L/C By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address: 000 Xxxxxxxx Xxxxxxx, X.X.,
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn.:
Facsimile No.: 000-000-0000
Commitment Amount: NATIONSBANC COMMERCIAL
CORPORATION
23.6% of the Revolving Credit Facility
and each Term Loan, Letter of Credit,
and IRB L/C By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address: 0000 Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attn.: Xxxx Xxxxx
Facsimile No.: 000-000-0000
AGENT:
NATIONSBANK, N.A.
By:
----------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President
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